Markets - General

Dairy Heifer and Calf Values Remain in the Stratosphere

Tue, 10 Jun 2025 13:03:10 GMT

Prices for dairy replacement heifers and beef-cross calves remain out of this world, with both springers and newborn calves reaching astronomical levels. Holstein springers topped out in May at $4,200 per head in Pipestone, Minn., and newborn beef cross calves exceeded $1,600 per head in Wisconsin. How far and long this launch into record territory will last remains to be seen, but beef-cross breeding will continue to make a big bang in the markets for the foreseeable future.

According to the National Association of Animal Breeders , more than 81% of beef semen sold in the U.S. in 2024 was purchased by dairies, and USDA estimates predict the inventory of U.S. dairy heifers over 500 pounds will be the lowest ever recorded.

Your Next Read: The Hidden Cost of Heat Stress on the Unborn Calf

Replacement Heifer Prices Hang in Record Territory

Tue, 08 Apr 2025 13:27:39 GMT

It’s history in the making in U.S. dairy animal trade right now, as springer values stay knocking on the door of $4,000 per head, and calf prices continue to soar. Newborn beef-cross calves are bringing north of $1,000 per head nationwide. Ironically, those calves also are at least partially the source of climbing heifer values. In the January 2025 USDA Cattle Report , lactating dairy cows showed an annual tally of about 9.5 million head, up about 3,000 head from the previous year. But the count of dairy heifers 500 pounds and over fell nearly 40,000 head as dairy producers continue to reach for beef semen to raise high-in-demand crossbred calves. That demand is fueled by a dwindling U.S. beef cow herd, which the same report noted was the smallest in 64 years.

Heifer Prices

(Maureen Hanson)

U.S. Dollar Sees Worst Weekly Drop Since 1995

Tue, 11 Mar 2025 17:50:59 GMT

After a week of trade war headlines, dairy markets started the week on a quiet note. What little action there was showed buyers willing to own NDM and cheese at these levels. Class III futures opened around a dime down with fears that last week’s headlines may continue. Last week, the U.S. dollar had the worst week-to-week performance since 1995 and that, combined with global dairy price premiums, should spark some export interest and support domestic prices.

Today’s Highlights from Ever.Ag’s Know Your Markets

CME barrels dropped another 2.5 cents today, settling at $1.6050 per pound, the lowest price since December. Spot blocks gained some ground, rising to $1.6325, a penny gain. Five lots of blocks and one of barrels traded. The only other movement was in spot NDM, which ticked up a quarter cent to $1.1575 per pound, with three loads exchanged.

Dairy futures didn’t see any major drops or increases today. Second quarter Class III declined to $17.37 per hundredweight, down a nickel to the life-of-contract low set last Thursday.

Tomorrow brings USDA’s March World Agricultural Supply and Demand Estimates report. Analysts are predicting a small decrease in world corn ending stocks and a slight increase for soybeans. Ahead of that report, nearby corn futures lifted 3.5 cents to $4.5875 per bushel, while soybeans dropped to $9.9975, a 10.5-cent loss.

Ever.Ag - The risk of loss trading commodity futures and options can be substantial. Investors should carefully consider the inherent risks in light of their financial condition. The information contained herein has been obtained from sources to be reliable, however, no independent verification has been made. The information contained herein is strictly the opinion of its author and not necessarily of Ever.Ag and is intended to be a solicitation. Past performance is not indicative of future results.

Buckle Up: Here's Why Cattle Prices Are Setting Up for Another Wild Ride in 2025

Mon, 10 Feb 2025 14:13:42 GMT

The cattle markets hit historic highs again to start 2025, and as USDA’s latest Cattle Inventory report showed U.S. beef cattle inventory fell to the lowest level in 64 years , tight supplies and strong demand could push cattle prices to even higher highs in 2025.

USDA’s annual Cattle Inventory Report released Friday shows the U.S. total cattle inventory shrunk another 1% over the past year, with the number of beef cows also down 1%.

Those numbers, along with questions around just how much higher these markets can go, were major topics surrounding the 2025 CattleCon in San Antonio, Texas, (the annual cattle industry convention) this past week.

Signs of a Slowdown?
Economists and market analysts knew the cattle herd was still shrinking, even before the report was released last week. But economists say there are some signs starting to signal that is slowing down.

“We certainly got smaller in 2024. That was actually kind of obvious about a year ago when you looked at heifer numbers,” said Derrell Peel, Oklahoma State University Extension livestock specialist. “If you look at the heifer numbers in this report, we don’t have a lot. And so we’re going to be challenged going forward to stop this liquidation. I think we might stabilize numbers this year, but I think growth is pretty much a long shot at this point.”

“I think we’re getting close to the bottom, as Darrell referenced,” said Don Close, senior animal protein analyst for Terrain, during the U.S. Farm Report live taping at NCBA’s annual convention. “I think the challenge is retaining enough heifers out of the supply that we have to provide the fuel for the build back.”

Calf Crop Was a Big Surprise
Casey Mabry, with Blue Reef Agri-Marketing, said there actually was a surprise in the latest cattle inventory report, and that wasn’t with heifer numbers.

“The biggest surprise to me was really looking at the total calf crop report, because we’re looking at the total cow inventory numbers. I think that probably caught some people off guard, having the calf crop a little bit bigger than what most people’s expectations were,” said Mabry.

Incentives Drive Outcome
With cash cattle hitting records to start 2025 a question on almost everyone’s mind is, can it continue? Mabry said it really depends on if demand can remain steady, since the supply side will remain tight.

“Incentives drive outcome and obviously with grain prices as cheap as they’ve been, and cattle prices as high as they’ve been, we’ve held on to some cattle. So it’s kept the front end of the market really, really tight and it’s kept packers chasing after cattle. So that ran the market $10 or $15 higher, in my opinion, than what we should have on the front end,” said Mabry. “So, it’s going to be really interesting to watch as we go through the back end of this thing. We’ve probably got to work through some stuff right here on the front end. But if the analysts continue to say we’re going to be tighter and demand stays pretty good, we’ll probably see prices exceed where we were before.”

“We’re Still Bullish”
Peel reminds producers there’s a great deal of risk in these markets. He said the markets don’t like uncertainty. With trade concerns and tariff threats, combined with a strong U.S. dollar, the combination is throwing uncertainty into the market.

“We’re very bullish and still bullish in general going forward for average prices,” said Peel. “But we also know that we’re subject to a lot of shocks right now. We’ve seen a couple already. We’re certainly vulnerable. There’s a lot of air below us since this market is so high. So producers really need to still do that risk management. Producers need to think about those marketing windows. If you got caught in a shock in one of those, it could really be devastating to you.”

Close has similar advice. He said with the development of insurance products, plus futures and options contracting, there are several ways for producers to manage risk today.

“At the price level we’re at, and just any measured retracement in the market, it could take you out of the game. At these price levels, it is absolutely imperative to have some kind of price risk management program in place,” said Close.

“I think you just need to run with what I call a keen sense of paranoia,” said Mabry. “I mean, be bullish, be excited about the market, but don’t get overly euphoric. We’ve got to remember back a short three or four years ago, we were all in the doldrums and very scared. And there’s a lot of people that were telling their kids to get into a different business. And now all of a sudden, we’re all jumping on the bandwagon of cattle and getting excited about this. So, we want to make sure that you guys are running your businesses like businesses and not gambling on cattle.”

Your Next Read:

Are More Record Cattle Prices Ahead in 2025?

Out Of The 10 Biggest Ag Commodities In The U.S., Leading Ag Economists Are Most Bullish On Beef Cattle

Wed, 27 Sep 2023 19:20:17 GMT

Ag economists’ view on the ag economy is starting to erode, but out of all the commodities, economists are most bullish on the cattle industry. That’s as leading ag economists from both the public and private sectors expect cattle prices to climb even higher in 2024.

The Ag Economists’ Monthly Monitor is a survey of nearly 60 ag economists from across the country, conducted by the University of Missouri and Farm Journal . THis month, they were asked to rank the 10 major ag commodities by financial outlook. Beef cattle came in at the top with dairy at the bottom.

“Cattle ranking so high was not a surprise, and dairy on the bottom, that part of the list was also not a surprise,” says Pat Westhoff, director of the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri. “Very high feed costs for dairy producers, milk prices were in the tank there this year. So, that makes very good sense. What was maybe a little bit of a surprise is that people were quite as positive about the soybean picture.”

For livestock, the ag economists revealed several things that could also impact prices between now and March, including:

Reduced supplies for beef, pork and chicken should offer price support
Consolidation and reduction could be seen in early 2024
Consumer economic health and demand

(Farm Journal)

Eroding Economic Outlook Overall

While bullish beef prices, the biggest story revealed in the September Monthly Monitor is the falloff in the ag economy — all three categories are lower than any of the previous three surveys. The Ag Economists’ Monthly Monitor shows lower row crop commodity prices, concerns about demand and a negative outlook for China’s economy are all contributing to the changing views, even as the cattle herd and U.S. corn and soybean crops continue to shrink. But the most influential piece of the farm economy might be the price of corn .

“I think a lot of things are coming together to make people more pessimistic about the short-term view of things,” says Westhoff. “We’ve got lower prices for some of the major commodities, such as corn, and that’s obviously a major player in all this. Higher interest rates aren’t helping as well. There’s just a general concern about the future of demand for U.S. agricultural products, which has probably gotten to be a more important concern this past month.”

Related Story: Ag Economists Turn More Bullish On Soybean Prices, Corn Prices Are a Big Red Flag

Economists say there are several factors driving agriculture’s economic health today, and will continue to do so over the next 12 months, including:

U.S. and global weather creating production challenges
Decline in many commodity prices
Below-trend yields for major crops in 2023
Strong cattle prices offset by lower prices of other livestock commodities
Generally high interest rates and input costs, despite some lower prices for fertilizer, etc., providing relief
Variable profitability across farm operations based on production challenges
Tight farm margins in some instances
Declining export demand
Uncertain international grain market factors
Increased production competition from South America

While there are several things that could impact the health of the farm economy, one economist says: “The biggest factor that will impact the health of the ag economy is the price of corn, by a long shot.”

What are the biggest drivers of row crop prices over the next six months? The September Ag Economists’ Month Monitor revealed the following:

Ongoing geopolitical tensions in China and Black Sea region
South America crop prospects for 2024, compared with new U.S. estimates of crop supplies
Export market demand changes
U.S. biofuel/energy policy, climate change policy and financial policy that could impact trade and domestic feed grain and oilseed use

(Farm Journal)

Economists fear higher interest rates could weigh on both livestock and row crops.

“Agriculture’s economic health is being impacted by weak demand for many commodities, which is suppressing prices. Low prices are especially challenging for farmers facing weather-related production challenges with fewer bushels or pounds to sell at those low prices. Although costs of production have come down, farm margins are tight,” says one ag economist in the anonymous survey.

Related Story: Could Cattle Prices Soar Through Next Year? That’s What Economists Think, And It Could Completely Change the Industry

Another economist says: “Building supplies of many commodities are leading to lower prices. Cattle and soybeans are the exception. Input costs, especially interest rates, remain high.”

Watch What’s Happening Around the Globe

One of the main themes that continues to surface in the Ag Economists’ Monthly Monitor is concern about global competition. As competition continues to beef up from countries such Brazil, it’s not just impacting grain exports, but also meat.

Arlan Suderman of StoneX Group says the increased competition globally is one of the main watchouts for grain prices.

“Russia is dumping record amounts of wheat on the world market and Brazil is dumping record amounts of corn on the world market, all while our livestock numbers are down which means feed usage is down,” Suderman says. “I think the positives are the biofuel issue that’s going to take some time to develop; we’re already seeing it on the soybean side. We hope to get some favorable decisions from the administration to support the corn side.”

So, what could change the outlook for lower corn prices? Suderman says there are several things, including what happens between Ukraine and Russia.

“I think the Black Sea war continues to escalate, with shipments of commodities out of Russia being curtailed. That’s a game changer if that continues to happen. The odds are very low right now, but those are slowly increasing the longer the war goes,” Suderman says. “On the other hand, tensions with China are increasing. I look for China to continue to try to diversify away from dependency on the United States for commodities, which means we needed to develop other markets domestic and abroad.”

Concerns About Deglobalization

One concern for U.S. agricultural exports as a whole, according to Don Close of Terrain Ag, is deglobalization.

“I think the slowdown we’re seeing in trade volumes, China is at the centerpiece, as well as the fallout that we could see from the Russia Ukraine situation. I have a lot of concerns about what we will see from Europe in the years to come. I think there’s a lot of stress factors there,” Close says.

The current economic meltdown in China is also a growing concern for many ag economists, according to the September Monthly Monitor.

“There are a lot of questions about what’s happening in China, and there are a lot of concerns that China’s economy has already slowed or will be slowing in the months ahead,” Westhoff says. “Since that’s a major demand driver, if that were to happen it might be a very strong negative. In this country, we’re seeing continued economic growth, but those high interest rates are indeed having an effect on household finances and will probably result in at least some slowdown in consumption over the next year.”

Big Crops Expected for 2024

In the September survey, economists were also asked to provide outlooks for 2024. As South America begins to plant next year’s crop, expectations are for Brazil’s big crops to just get bigger, at a time when costs at home are on the rise.

“The first thing is costs,” says one economist when asked to provide an outlook on the next 12 months. “Interest rates are higher and likely to increase some more, but fertilizer prices are lower. Lower feed prices are certainly providing some relief to livestock producers.”

Ag economists expect U.S. farmers to produce big yields in 2024, with the expectation for El Nino to play in producers’ favor.

The September Ag Economist’ Monthly Monitor shows a projection of trend yields for 2024:

Corn: 180.4 bu. per acre yield
Soybeans: 51.8 bu. per acre
Cotton: 837 pounds per acre

While operating costs are expected to stay high, the Monthly Monitor shows certain input costs, such as fertilizer, continue to trend lower for the 2024 corn crop.

When economists were asked to give their expectation for the 2024 corn budget versus 2023, the September survey shows economists expect the following changes:

Market revenue down 4.7%
Fertilizer costs down 21%
Fuel costs up 1.5%
Chemical costs up 3.2%
Operating interest cost up 8.4%

“We’ve seen a sharp drop in spot prices for fertilizer already, which translates to lower prices for fertilizer for next year’s crop,” Westhoff says. “That could be some significant cost savings for crop producers. Likewise, on the livestock side, the fact we’re projecting lower prices for grain and soybean meal suggests we could have lower feed costs in 2024 as well.”

Even with some relief expected on the fertilizer side, economists still think higher costs and lower commodity prices will eat into outlooks for 2024.

“Today, in areas where crop production is likely short, there is some financial deterioration between the guaranteed crop insurance levels and input costs. In areas with good production, such as Ohio and Indiana, their production will likely lead to some fairly good profitability,” says one economist. “In 12 months, lower crop prices are going to hurt 2024 crop profitability.”

Could Cattle Prices Soar Through Next Year? That's What Economists Think, And It Could Completely Change the Industry

Thu, 31 Aug 2023 16:03:46 GMT

The U.S. beef cow herd is now the lowest since 1962, and with the majority of ag economists now expecting rebuilding to take place until Q2 of 2024 or later, that means even higher cattle prices could be ahead. Ag economists say as the U.S. cattle herd continues to shrink due to drought and other pressures, the August Ag Economists’ Monthly Monitor revealed it could also cause massive consolidation in the cattle industry, not only with cattle producers, but also meat processors.

The August survey is the third survey of the Ag Economists’ Monthly Monitor , a joint effort between the University of Missouri and Farm Journal. The first-of-its-kind survey collects insights from ag economists across the U.S. Nearly 60 economists are asked each month to provide their forecasts and views. They represent a wide geography with expertise in grains, livestock and policy.

Cattle Prices Could Climb

Continued consolidation in livestock is a major concern for economists. The survey was completed on the heels of Tyson Foods and Smithfield announcing plant and farm closures for both pork and poultry . However, economists think consolidation in cattle will also be a major theme in 2024, and it could have an impact on major meat processors as ag economists think cattle prices could push even higher, a trend that could continue for at least another year.

The August survey also asked economists when they think cattle herd expansion will start to take place. The majority think cattle contraction will continue for at least another year. A smaller percentage think it could happen in the second quarter of 2024.

“It will probably be late 2025 or 2026 before we see significant increases in beef production. So if demand at all stays with us, we can be talking about these kinds of lofty prices for several months down the road,” says Brown. “I kind of wonder when we talk about changing structure whether or not the cow-calf industry will look different. So maybe bigger operations, perhaps some of the smaller beef cow operations will have retired. And we won’t see those back. So I’m curious to watch consolidation, what’s been probably the slowest segment of agriculture to consolidate over time.”

The survey shows ag economists think cattle prices could climb even higher over the next year.

“Not only have cattle prices been moving higher, but our economists have been upping their estimates of cattle prices to the tune of about $10 [per head] over the last couple of months,” says Scott Brown, interim director of the Rural and Farm Finance Policy Analysis Center who also helps author the Ag Economists’ Monthly Monitor,. “So a lot more optimism. I think that just has a lot to do with the short supplies of cattle that we’re beginning to see in the marketplace.”

Brown says economists are still concerned about the lack of profitability currently projected for pork producers, but they are turning more optimistic on prices.

“As we’ve done the last couple of months, prices have recovered and economists’ outlooks have gotten a little brighter, even though we’re talking about some fairly low prices. Dairy is the one that still sticks out as the worst, and our survey basically shows not a lot of change for prices with a projected $20 (per cwt) for the all milk price forecast for the next 18 months or so. If the costs stay where they are today, it makes that a pretty tough industry to participate in.”

Massive Consolidation?

What factors could impact livestock prices over the next six months? The main theme continues to be tighter cattle supplies and demand.

“Beef cattle supplies will continue to tighten, and beef production will continue falling. Beef demand remains remarkably resilient,” says one ag economist.
“Factors impacting livestock prices include U.S. herd liquidation, global meat availability and domestic demand,” says another economist in the anonymous survey.
“Consumer demand will impact livestock prices the most in the next six months,” the survey reveals.

“We asked folks a lot about what they see as important in the livestock markets as we look ahead, and we did see that consolidation word come up, especially in cattle markets,” says Brown “So although we’re talking about record cattle prices, and maybe at some point record profitability, although not today, I think there’s a lot of concern about what this does for the industry long-term.

“I think packers are going to be in an awful difficult spot here for a period of time,” Brown adds. “Feedyards could also be in a tough spot. It’s tough to keep yards full with the lack of supplies of feeder cattle. So the idea is that these industries are going to continue to adjust. And I think 2021 and 2022 were just such phenomenal demand years that they almost masked what were some very high costs faced by all of the segments of the livestock industry.”

Consolidation Concerns

The survey also asked economists to explain the reasoning behind their herd expansion forecasts. Consolidation was also a major theme as economists explored what the current state of the cattle industry could mean for the future of agriculture.

“I do think consolidation of all parts of the beef industry is coming. I think this will be a time when some of our well-established 100-cow operations will think about exiting,” says one economist.
“We will see prices that significantly surpass 2014-2015. Processing plants will consolidate due to fewer cattle available to process. Producers will be slower to expand than in 2014-2015 because of continued drought and higher borrowing costs. I expect the high prices to last longer than in 2014-15,” says another economist.
“Further reductions in slaughter will put continued pressure on beef processors while boosting prices for cattle producers,” one economist says in the anonymous survey.
“The impact of the smallest beef cow herd in 60 years will likely put pressure on processing and retail margins, may give a more competitive advantage to competing proteins, and could result in a smaller industry going forward,” one economist says.

The ag economists surveyed expect net farm income to hit $125 billion to $130 billion. According to Brown, that’s not the record $160.2 billion U.S. agriculture saw two years ago, but Brown points out that it’s still high.

“It just reminds me to say not as good as where we were a couple of years ago, but also maybe not as tough as some would have thought once we started to see these lower prices,” says Brown.

Corn vs. Soybeans Price Projections

Ag economists are more optimistic about soybean pries than they are corn prices, and one of the main reasons is demand. According to the latest Monthly Monitor, economists indicate soybean prices will trend higher not just this year but also for the 2024/25 crop. For corn, the survey shows the opposite with the expectation for corn prices to fall.

“On the crops side, the one to be optimistic about is soybeans,” says Brown. “According to the latest Ag Economists’ Monthly Monitor, economists say soybean demand is certainly stronger than we might see in a commodity like corn, as biofuels and renewable diesel will all continue to maybe drive some crushed demand as we look ahead.”

(Farm Journal)

Brown says, as a result, economists are also more optimistic on soybean prices moving forward compared to corn. Part of the concerns are due to an expectation for yields to increase, but the other is the negative outlook for demand.

“On the corn side, a little less optimism. I would say weak demand exports, in particular, seem to be a lot of what we have answered back from the survey. And the expected corn prices in the next 18 months ahead over the last three surveys certainly show a downward trend in what folks expect on the corn side,” says Brown.

Economists say the biggest impacts on crop prices will come from:

Demand domestically (including for feed grains) and abroad (particularly in China)
War in the Black Sea if shipments from Russia are curtailed
El Nino presence and weather in major crop production areas of the world
Strong competition in the international corn export market and U.S. export levels
U.S. crop acreage stable, better yields pushing down prices

Overall Outlook for the Ag Economy

Brown says the monthly survey shows economists’ views of the ag economy haven’t changed much in the three months of conducting the survey. The August data show economists are:

5% less optimistic about the health of the ag economy a year from now relative to today
10% less optimistic when looking at the ag economy today versus 12 months ago

(Farm Journal)

“I think the biggest thing to note is just how resilient we’ve been. And that shows in some of the answers we got back from the economists,” says Brown. “Although there’s been lots of concern about consumer demand and international demand for a lot of our commodities, the ag economy has been resilient.”

What Will Drive the Ag Economy Over the Next 12 Months?

The economists turned more bullish on livestock in the latest survey, while the outlook for corn prices produced more pessimism. But economists continue to be impressed with how farmers and ranchers have withstood higher costs on their operation.

“The financial strength on many farms is rather strong and many have taken advantage of relatively high prices for crops and cattle. Hogs and poultry are in somewhat worse shape now than last year. Looking ahead, I expect that lower crop prices and stable input prices will put a squeeze on high-cost crop producers. Consolidation across all of agriculture is something I expect to be a theme in the year ahead,” says one ag economist in the anonymous survey.

“We’re seeing an explosion of competitive production coming out of Brazil at the same time that geopolitical risks are increasing in a world facing mounting credit risks,” was how one economist responded to the question.

“The current most-important factors are weather and input costs. In one year from now, it will be Brazilian production policy,” says another economist.

“Agriculture is benefitting from somewhat lower input prices, but weather is creating challenges in production. During the next 12 months production costs should continue to moderate, but prices are also moderating so that the net change is slightly positive. A new farm bill needs to be completed to create more certainty and reduce revenue risk,” is another response from the anonymous survey.

Projecting the Positives Pieces for the Ag Economy

(Farm Journal)

With so much concern about international competition and domestic demand, economists also pointed out some positives in the ag economy, including farmland values and the U.S. economy.

“The land value market has a lot of supportive fundamentals under it and will withstand a couple years of negative farm income. As a result, farm balance sheets will stay rather healthy and those that have available working capital and cash will be positioned well,” says one economist.
“At least so far, the U.S. economy has proven more resilient in 2023 than many had anticipated,” was another response in the monthly survey.
“Lower fertilizer costs and a relatively stable U.S. economy,” says another economist.
“I see strong international markets for pork and beef as the most positive aspect regarding the outlook of U.S. agriculture,” one economist says.

Ag Economists Turn More Positive Longer-Term On the Farm Economy

Thu, 20 Jul 2023 20:01:20 GMT

The July Ag Economists’ Monthly Monitor shows weather extremes and wild swings in the commodity markets are the two biggest factors impacting short-term outlooks, but the economists surveyed expressed a more favorable view longer-term. The latest survey also shows the biggest wildcard for agriculture over the next year could be geopolitical risks tied to China and the war in Ukraine.

This is the second survey of the Ag Economists’ Monthly Monitor , a joint effort between the University of Missouri and Farm Journal. The first-of-its-kind survey collects insights from ag economists across the U.S. Nearly 60 economists are asked each month to provide their forecasts and views. They represent a wide geography with expertise in grains, livestock and policy.

This month’s survey showed several key changes from June. Economists say they believe USDA’s current corn and soybean yield projections are still too high, and they anticipate a drop in forecasted corn and soybean prices. The economists in the July survey also predict cattle and hog prices could continue to climb higher this year.

“To me, the biggest thing that sticks out in the July survey is the more positive view 12 months into the future relative to where we were in June,” says Scott Brown, University of Missouri agricultural economist who helps author the survey each month. “In the very short run, the economists are a little less positive than where they were in June. I think that has a lot to do with the weather and general market moves we’ve seen over the last few weeks.”

(Farm Journal)

The longer-term optimism revealed in the survey is despite economists’ expectations for two consecutive years of declining net farm income, falling short of the record set in 2022. The July Monthly Monitor forecasts net farm income to fall to $132.8 billion in 2023, which is below the $134.7 billion in the June survey and USDA’s current net farm income estimate of $136.9 billion. That’s still a big drop from 2022, when USDA says net farm income reached $162.7 billion.

This month’s survey also tried to peel back the layers of what commodities might be aiding the more positive long-term outlook versus weighing on the overall health of the ag economy in the short-term.

“On the crop side, it’s positive to very positive,” Brown says. “There are a few in the negative category, but a majority of economists responded the crops side of the equation looks positive. Whereas, on the livestock side, we have more negatives than we have positives.”

Economists say there are several positive developments that could shape U.S. agriculture, such as continued productivity and efficiency gains; a healthy farm economy and balance sheets; projected shifts in interest rates; new and expanded opportunities for renewable fuels; and the strength of the U.S. cattle market and meat exports as a whole. Geopolitical issues could also impact global crop production and, in turn, bring some demand back to the U.S.

Cuts to Projected U.S. Crop Yields

The survey was sent to ag economists the day after USDA released its most recent yield forecast in the July WASDE report. In what was called a rare move early in the growing season, USDA cut its corn yield forecast by 2.2% to 177.5 bu. per acre, down from 181.5 bu. per acre in the June report. The July Ag Economists’ Monthly Monitor is nearly 3 bu. per acre lower than USDA, with the group of ag economists projecting a yield of 174.9 bu. per acre.

“For me, the interesting piece of this story is there’s a lot of variability in the responses from those being surveyed, which highlights how varied the weather has been as you move around the country,” Brown says. “We had yield estimates slightly below 170 bu. per acre on the low end and some above 180 bu. per acre on the high end.”

(Farm Journal)

Brown says the soybean estimate also came in lower than both USDA’s July WASDE report and the June Ag Economists’ Monthly Monitor survey. USDA estimates soybean yield at 52 bu. per acre, and the average ag economists’ estimate is 50.6 bu. per acre, a 0.5 bu. cut from the June survey.

“There was a little less variability from top to bottom on those yields, but when you look at prices, even with what was a lower corn yield, their estimate of 2023/2024 corn prices went from $4.99 in June to $4.80 in the July survey,” Brown says.

(Farm Journal)

What Economists are Watching the Next Six Months for Crop Prices

When asked what factors will impact crop prices in the next six months, economists said:

Final yields
Export demand and competition
Weather domestically and abroad
Geopolitical risk in the Black Sea and China, including developments that impact ag exports in Ukraine/Russia

“I think a couple of things stick out beyond the weather discussion, and one is export demand as well as global competition, such as what’s going to happen with South America in terms of competing with U.S. corn and soybean markets.

“The economists certainly continue to talk about the geopolitical risk in the Black Sea and China, in particular, and what that means for our ability to export corn and soybeans as we look ahead,” Brown says. “Those are really the two big ones that came out of this survey.”

What Livestock Economists Are Watching the Next 6 Months for Livestock

Ag economists think the following factors will impact prices the next six months:

Changes in feed costs and impact of corn prices
Rising milk prices
Consumer meat demand and influences from macroeconomic factors, both domestically and abroad
Placements of cattle on feed

Brown says while the majority of economists are concerned about feed costs and the impact on livestock producers, the second-biggest concern revealed in the survey is demand. Economists pointed to both domestic and international demand as possible problem areas.

“2021 and 2022 were extremely positive from a demand standpoint, and we seem to be backing up a little bit in 2023,” Brown says.

Economists More Bullish on Cattle and Hogs

The July Ag Economists’ Monthly Monitor shows economists are more positive when asked about cattle and hog prices, but they have a more negative view on dairy, which they consider the biggest weight in the livestock sector.

“When you look at where pork prices have gone over the last month, it’s gotten more positive. Now, I don’t want to suggest we’re back in black ink, but we have seen recovery in things like the pork cutout value,” Brown says. “The economists continue to worry about how the general economy will affect livestock going forward, but overall, it seems we’re seeing a more positive view from the livestock perspective in this month’s survey.”

(Farm Journal)

Based on the July monitor, economists expect average milk prices to fall back to 2021 levels, but production costs will continue to be higher in 2023 versus 2021.

“No. 1, the economists continue to worry about feed costs,” Brown says. “We continue to see fairly high feed costs affecting profitability. So even in the case of beef cattle, where we’re talking record cattle prices, we’re not talking record profitability because of the feed cost side.”

(Farm Journal)

Longer-Term Look at the Health of Agriculture

Over the next 12 months, there are several things that could shape the health of the ag economy, according to the July survey:

Crop prices and production costs, including inputs, rental rates, land values and supply chain disruptions
Subsequent impact on producer margins and the protein sector from rising interest rates and inflationary pressure
Weather considerations, including drought conditions in the short run and yield impacts in longer run
Geopolitical tensions and competitiveness of U.S. ag exports
Changes in consumer demand domestically and abroad, new markets for agricultural products, including biofuels

“One thing that came pretty strongly out of the survey is the continued increases in productivity in agriculture, which makes us more efficient,” Brown says. “The farm economy is generally healthy, and when you look at balance sheets, they are still really, really strong in many cases. That’s despite a lot of the issues we’ve talked about.”

In the July survey, economists voiced more concerns about interest rates and the impact on operating loans. One economist also mentioned the industry might be underestimating the negative impact Proposition 12 could have on the entire livestock industry.

The Turbulent Relationship Between the U.S. and China

While none of the ag economists surveyed think the U.S. will enter into a trade war with China in 2023, economists continue to remain cautious about China, which could have a direct impact on U.S. agriculture.

When asked to list the top factors shaping trade relations between the U.S. and China, economists said:

POTUS and political polarization in the U.S.
Non‐agricultural geopolitical tensions, including national security concerns, support of Taiwan and limits on technological production
Changes in China’s economic growth, including population and demographics
Russia’s invasion of Ukraine and Russia’s relationship with China
Quality, price and availability of U.S. products compared with global competitors

Potential Events/Factors Not Getting Enough Attention Today

The July survey also asked economists to outline any factors or events that currently aren’t receiving enough attention but could shape agriculture over the next 12 months. One economist brought up impacts of geopolitical risks and fallout from the war in Ukraine, but also a potential war between the U.S. and China.

Other potential events that could cause a major shakeup in agriculture include:

Weather events, domestically and abroad, warranting a broader conversation on climate
Potential for a significant recession in China
Focus on renewable diesel obscuring importance of RFS in overall biofuel use
Workforce concerns for producing, processing and transporting agricultural products domestically and abroad
Declining EU pork production and commerce implications of Proposition 12
Strikes at shipping ports in Vancouver and potential for upward pressure on potash prices with reduced production capacity at Nutrien mines in Saskatchewan

Previous Ag Economists’ Monthly Monitor Coverage

Most Ag Economists Think It’s Unlikely the 2023 Farm Bill Will Be Written in 2023

High Production Costs Could Weigh on the Ag Economy Through 2024, New Survey of Economists Finds

High Production Costs Could Weigh on the Ag Economy Through 2024, New Survey of Economists Finds

Wed, 28 Jun 2023 19:15:23 GMT

Stronger cattle prices combined with the recent run-up in crop prices aren’t enough to outweigh concerns about the impact high input prices will have on farmers this year and into 2024. While most economists agree the next 12 months could produce more financial challenges for agriculture, views vary on how much financial pressure producers will see and offer differing opinions on the U.S. crop production picture and commodity/feed prices.

The results are part of the June Ag Economists’ Monthly Monitor, a new survey of nearly 50 agricultural economists from across the country. It’s the first survey of its kind, collecting insights from economists who represent both the private and public sectors. The economists represent the ag sector across a wide geography and also have expertise in grains, livestock and policy.

The survey is conducted anonymously to allow the highly respected agricultural economists to speak more openly about their economic and production forecasts since their responses won’t be attributed to the university, company or organization they represent. The Ag Economists’ Monthly Monitor is a joint effort between the University of Missouri and Farm Journal . The university conducts the survey, collects and crunches the data while Farm Journal distributes the results.

Main Takeaways from the June Survey

Highlights from the first Ag Economists’ Monthly Monitor include:

The perceived financial health of U.S. agriculture is trending lower and is expected to continue to decline over the next 12 months.
Production costs, global competition, geopolitical risks, drought and demand headwinds are among the main drivers.
The majority of agricultural economists expect farm income to drift lower, with some expecting levels to land closer to the five-year average in 2024.
High production expenses are the biggest obstacle in 2023.
2023 crop yield estimates vary widely among the economists surveyed.
Economists expect crop prices to drift lower in 2023 and 2024.
Beef cow supplies are forecast to continue to decline this year.

A Current and Future Snapshot of the Agriculture Economy

The monitor shows the perceived financial health of U.S. agriculture has moved slightly lower over the past year, and economists expect that trend to continue over the next 12 months.

(Farm Journal)

The main drivers of the waning outlook include production costs, global competition, geopolitical risks, drought and domestic demand for agricultural commodities.

“I think what’s most surprising is that, on average, those more than 40 economists are in alignment with the more general perception of where agriculture is heading,” says Scott Brown, an agricultural economist with the University of Missouri, who helps author the survey. “What surprised me is the amount of volatility around that average estimate. It just reminds me there’s so many issues at play today, and when trying to predict or suggest the future, even these economists have a wide opinion in terms of where we’re headed in different commodities.”

Falling Net Farm Income

The Monthly Monitor shows all respondents expect farm income to decline from the record level of 2022 for 2023 and 2024. The range of survey responses is what produced the most volatility, with responses varying by as much as $51 billion from the highest to the lowest estimate.

Some economists are projecting farm income levels to return to the 2017-21 average in 2024. The main driver for 2023 forecasts is the expectation for higher production expenses. The biggest factor for the waning outlook in 2024 is the outlook for lower commodity prices.

“It seemed like cattle was the most optimistic commodity out of the mix,” Brown says. “I think there was still some expectation that corn and soybean prices could stay on the higher end, but generally there’s less optimism than coming off the records we would have seen back in 2022. That’s when farm income was a little north of $160 billion, and when you look at some of the forecasts for 2024 in our survey, it’s closer to $120 billion on average. Some are even suggesting farm income levels could fall back to where we were pre-2020, so pre-COVID.”

(Farm Journal)

Wide Range of Yield Estimates

Ahead of USDA’s updated look at planted acres in the June acreage report set to be released Friday, economists don’t see many big changes compared with what farmers intended to plant in March. According to the June Ag Economists’ Monthly Monitor, the average survey result was 92.05 million planted acres for corn, which is up slightly from the 92 million acres reported by USDA’s farmer survey in March. The range included 90.5 million acres on the low end and 93 million acres on the high end.

Economists think farmers planted 87.98 million acres of soybeans this spring, slightly higher than the 87.5 million acres reported in March. The highest estimate was 89 million acres of soybeans, with the lowest estimate of 87 million acres.

In March, USDA reported farmers intended to plant 11.26 million acres of cotton. The survey showed economists think with the weather challenges in areas such as Texas, cotton farmers actually planted 11.24 million acres, with the maximum response of 11.9 million and 10.95 million on the low end.

Brown points out the yield variation largely depends on upcoming weather, but the dry weather is creating a wide range of yield estimates this year. According to respondents in June, the average estimate for yield includes:

Corn: 178.68 bu. per acre versus 181.5 bu. per acre (USDA’s current estimate)
Soybeans: 51.06 bu. per acre versus 52 bu. per acre
Wheat: 44.47 bu. per acre versus 44.9 bu. per acre
Sorghum: 68.17 bu. per acre versus 69.2 bu. per acre
Cotton: 855.18 pounds versus 841 pounds

“I think when you look at both corn and soybean acres, there wasn’t a lot of deviation from the Prospective Plantings report USDA came out with a few months ago, so we didn’t see a big change there,” Brown says. “On the yield side, there are certainly some differences. The average yield estimate, on the corn side from the survey was a little more than 178 bu. per acre, with a downside of 175 bu. Likewise on soybeans, that came in at about 51 bu. per acre. Both corn and soybeans are below where USDA currently sees yields. I will say those are going to change quickly as we look at weather and what’s occurred since the survey would have gone out roughly a week ago now.”

(Farm Journal)

Economists also expect crop prices to decline this year and next; however, there is a wide range in estimates signaling volatility will continue.

The average corn price is estimated to hit $4.99 per bushel for the current crop year and $4.74 for 2024/2025. The high range of the estimate for this year is $6 per bushel, with a low of $4.25 per bushel. Soybeans are also expected to trend lower, with an average estimate of $12.52 per bushel this year. The high came in at $14 per bushel. The low estimate was $10.85 per bushel. The average estimate for 2024/2025 is $11.90 per bushel.

Wheat prices are estimated to average $7.63 per bushel this year, with a low of $7 and a high of $8.49. The average estimate for wheat prices in 2024/2025 is $7.10 per bushel, with a high of $8 and a low of $6.49.

(Farm Journal)

Mixed Outlook on Livestock

The June Ag Economists’ Monthly Monitor also asked economists to provide estimates about beef cow inventory as of July 1, which is a report USDA will release on July 21. Economists who responded expect cow inventory to fall to 30 million head, which represents a decline of 1.2%.

Respondents also see fed cattle prices in 2024 trending to over $181 per hundredweight. But responses also produced high volatility, with one economist even thinking fed cattle prices will average above $195 per hundredweight in 2024.

Most everyone expects a contraction,” Brown says. “With the dry weather we’ve had in cattle country, Oklahoma, Kansas, Nebraska, Missouri, to name a few, I think we will continue to see fewer beef cows when we get that report out in mid-July. There were some who are even calling for larger declines than the nearly 30 million head. It reminds me we’re going to get tighter, and we’re not done talking about record cattle prices if these forecasts hold true.”

(Farm Journal)

Economists are less optimistic about hog prices and milk prices producers will receive this year.

Ahead of the next Hogs and Pigs report from USDA later this week, economists think the breeding hog inventory will be 99.27%, compared to 100.5% one year ago. Economists are more bullish when it comes to exports, but not enough to improve their outlook on hog prices.

“They weren’t as optimistic on cattle or dairy,” says Brown. “When you look at what they were saying for 2024 hog prices, still, the average was below $61. Which if costs stay where they are today, that means red ink continues into 2024. Likewise, the projected all milk price for 2024 is $20.50 in our survey. That probably also makes red ink in 2024.”

The Likelihood of a U.S. Recession

Another major economic indicator for livestock producers is the general economy, as it historically has a direct impact on domestic demand. Of those surveyed, economists expect interest rates to move up 2% over the next six months.

“Although there was a wide range of responses, most economists felt the U.S. economy is not currently in a recession and will not enter one during 2023,” Brown says. “I will point out, though, there appears to be continued uncertainty about the expected general economy health for 2023, given survey responses.”

The majority of economists “somewhat disagree” the U.S. will enter into a recession this year. While at least eight economists say they “somewhat agree” a recession is looming yet this year.

(Farm Journal)

Looking Ahead to July

The June Ag Economists’ Monthly Monitor survey is a current snapshot of economists’ views. The survey will be sent to participating economists just days after USDA releases its WASDE report each month. Less than two weeks later, the results will be released.

“It is fairly current, but I’ll just say weather matters a lot, as we talked about, especially with yields. We’ll see how this changes, being able to now come back to the same group and ask what they expect corn and soybean yields to be in another few weeks. We’ll also have the first survey under our belt, and it will be interesting to watch those changes,” Brown says.

Looking to the second survey, Brown says he’s interested in watching changes to the crop-yield side of the equation. Longer-term, he thinks the monthly monitor will reveal bigger trends about the general economic health across all of agriculture and how those forecasts change from month to month.

“I’m really curious to watch [the general economic health] as we get more observations, and see what July looks like relative to June in terms of overall economic health,” he says. “I’m curious to watch as this group of experts continues to digest what’s happening in agriculture.”

Will Cattle Prices Smash New Records This Year, Topping 2014?

Sat, 04 Feb 2023 17:30:41 GMT

After four years of liquidation, the U.S. cattle herd continues to contract . With drought still a driving force behind lower cattle numbers, market experts think cattle price could top previous price records set back in 2014.

According to the semi-annual cattle inventory report , total beef cow inventory numbers were down 4% year-over-year, coming in at 28.9 million head. According to Drovers, the total beef cows reached the lowest point in inventory in over 50 years.

According to Don Close, chief research and analytics officer for Terrain , the inventory report revealed even tighter supplies than what the market expected.

“I think we’ve been a little bit misled because of the cattle on feed numbers still at 100%,” says Close. “But if you look at the numbers behind that, and what’s available for replacement cattle, as we go through 2023, I think that supply is going to contract at a substantially faster rate than what we’ve been expecting.”

The Gas Tank is Empty

Close expected the inventory report this week to show some heifer retention taking places in areas like the Dakotas, Montana and the Southeast. The report revealed the opposite, which means the stronger cattle prices could be a trend longer-term.

“The report to me, it just shows the gas tank empty, and all classes of cattle,” says Close. “And so I’d say the biggest surprise for me going into that record is there’s been absolutely zero heifer retention to this time. And I agree with Derrell, we don’t have the green light to move forward yet.

It’ll Take Longer to Rebuild This Time

With heifer retention low, it paints the picture of a smaller calf crop. Peel says that’s another reason he thinks the rebuilding of the U.S. cattle herd will take longer than a decade ago .

“It’s going to take longer to rebuild this time, because I do think the gas tank is empty,” says Close. “It’s going to take longer to develop heifers for breeding. And when you look at the biologics of the way the cattle industry works, it’s going to take longer than it did the last time, certainly in terms of our ability to rebuild the herd and get beef production back up once it comes down here, going forward.”

Read More: Will Volatility and Uncertainty Delay the Next Cattle Cycle?

The U.S. saw extreme drought impact the cattle herd, leading to tighter supplies in the foreseeable future, with rebuilding likely to have a longer tail than the last time and the price forecasts remaining bullish. But now it’s a question of if prices can top the highs set back in 2014, and Close thinks cattle prices will hit new highs.

“I don’t think there’s any question about it,” says Close. “If we look at the low 170 level on fed cattle that we saw at the peak of the 2014/2015 market, I think before this one’s done, we will go through those old historical highs with gusto. And to support that, I still think we’re working with a very solid demand base under the market, which is only going to exacerbate this whole situation.”

Higher Highs for Prices?

Peel thinks cattle prices will continue to trend higher, but when could prices peak? Peel says that depends on a few different factors, but he’s watching either the end of this year or early next year before prices find the top.

“The real spike in prices will come when we do start that rebuilding process and we do start retaining heifers,” says Peel. “That’s what squeezes slaughter in the short run, and we’re not sure when that’s going to happen. It still depends on the drought, but it could certainly start this year. It’s either late 2023 or into 2024 when we get that real spike in prices, and Don’s absolutely right with there’s no doubt we will see record prices for both feeder cattle and live cattle.”

AgDay TV Markets Now: Kevin Good of CattleFAX Has a Bullish Cattle Price Outlook for 2023

Will Volatility and Uncertainty Delay the Next Cattle Cycle?

COVID-19 Disruptions Causing Historic Economic Changes

Mon, 29 Nov 2021 23:33:19 GMT

Nearly two years after COVID-19 invaded our world, we are still living with its disruptions, but we should not overlook the more traditional factors also at play, says economist and financial expert Marci Rossell.

THE UNEMPLOYMENT PARADOX

Rossell, former chief economist for CNBC, says she has never seen such a shift in the labor market in a span of 18 months. COVID-19 spawned job losses, and now businesses face a worker shortage, despite the increase in wages and benefits.

(Farm Journal)

“I expected when the added unemployment benefits were curtailed, the labor market would loosen up,” she says. “That is not what has happened.”

We are in the midst of a great labor realignment, Rossell says. The improvement that might have been seen collided
with demographics:

People generally tend to be inert; they don’t like change. They stay in their same job with their same boss, in their same house. The pandemic cut such traditional connections.
Since the pandemic, the U.S. has seen 1.33 million “excess” retirements as those who planned to stay on a bit longer were pushed over the edge.
The number of people turning 18 years old (considered full employment age) has been falling. Ten years ago, it was 4.8 million annually; now it is 4.4 million, so there are 400,000 fewer potential employees every year.
In 2020, there were 300,000 fewer babies born than expected, so that spells another labor shortage 18 years from now.

SPEEDY STOCK MARKET RECOVERY

The stock market initially fell 30% due to the pandemic; it is now 32% above its level prior to COVID-19, implying a positive outlook for the economy. Rossell says the rebound was not unexpected; the surprise was the speed of the recovery.

One contributing factor was the top five S&P companies actually benefiting from the pandemic: Amazon, Alphabet (Google), Microsoft, Apple and Facebook (now Meta).

“Next year these will probably not be as strong,” Rossell notes.

ENERGY PRICES ON THE REBOUND

Oil prices actually went negative for a time before the pandemic. The recent $80 per barrel was last seen in 2015, before the advent of the shale revolution that shifted the U.S. from the world’s largest importer to its largest producer and a net exporter.

For perspective, however, Rossell says: “Keep in mind that crude oil was priced at $130 per barrel at one time, $50 above recent prices.”

SHIPPING SNAFUS PLAGUE TRADE

Early in the pandemic, shipping firms could not find enough business and cut capacity by 11%. Now global shipping volume is 27% above pre-pandemic levels. The cost to ship a container jumped from $2,000 to $10,000. Ships are sitting in ports waiting to be unloaded.

“Trade relies on two-way traffic,” Rossell explains. “Asian countries did not support consumer income as the U.S. did, so demand for ships going back to Asia plummeted.”

Rossell predicts the imbalance in container use and lines at U.S. ports will ease in January, when the Chinese New Year shuts down the outflow from China. “But it will be a tough three months between now and then,” she cautions.

INFLATION RATES NEAR 30-YEAR HIGHS

Inflation is at its highest level in three decades, and September’s 4.4% surge was the fastest 12-month increase since 1991.

However, Rossell points out, the Federal Reserve watches the “trimmed mean rate of inflation,” which removes the outliers — single items that drive inflation in the short term. For instance, used cars account for a third of total inflation right now. Compared with September’s overall rate, the Trimmed Mean was only 2.3%.

Following its meeting the first week of November, the Federal Open Market Committee announced the Fed will start paring its $120 billion in monthly bond purchases by $15 billion per month, putting it on target to finish tapering mid-2022. No interest rate adjustment was announced.

LIFE CHANGES DRIVE HOUSING

The housing market is up 20% in a single year. What is different from the bust of 2008:

Leverage
Lack of speculation

“Lending standards are high right now; the threat of default is not similar to the past boom,” Rossell says.

People’s COVID-19-created desire to live differently, not speculation, is driving this boom. Changes in life, work and play are permanent, and those changes mean new needs in living space — an office, perhaps an in-home gym, better cooking space, possibly a garden.

Demographics are driving the housing market: Most Millennials are buying homes in their 30s and this is the key decade. At the same time, the number of builders and construction companies are falling, while materials are in tight supply.

(Farm Journal)

As Dairies Dump Milk, Frustration Mounts Over Retail Buying Limits

Sat, 30 Jan 2021 16:06:46 GMT

From Georgia to Pennsylvania, videos like this are flooding social media. Dairy producers are facing a devastating scenario and being forced to dump milk down the drain . For some dairy farmers, this marks a first.

“This is the first time in the 32 years I’ve been in business that we’ve had to dump milk in the fields,” says Arnie VanDieden, a dairy producer in Texas.

The Texas producer isn’t alone. Paul Hartman in Reading, Penn. has also been in the business more than 30 years and faced a similar scenario earlier this week.

“Our dairy processor told us on Monday,” says Hartman. “They gave a letter that the driver dropped off that said they were supposed to dump our milk for the next two days; they weren’t going to pick it up. Right away when we heard it, we were shocked. All we hear is the milk is in demand, the stores are having trouble getting it, and then all of a sudden, they’re asking us to dump our milk. So that was kind of confusing.”

The Sudden Loss of Demand

Hartman’s processor told him the reason is a backup in demand. As COVID-19 hit, and industries like restaurants and food services saw an abrupt halt I business, the crisis started to unfold.

“We don’t have an outlet for this milk,” explains Scott Brown, economist with the University of Missouri . “Even if we have plants able to try to process that milk, there’s a little reason to do it at this point due to lack of demand.”

From high-end restaurants to fast food chains, fewer people are eating out and instead, staying at home due to stay-at-home orders. In turn, those consumers are eating fewer pounds of key items like butter and cheese. Therefore, a portion of the nation’s milk supply is without a home.

“The decline in the food service business has not been offset by the increase in the retail side of business,” says Michael Dykes, president and CEO of International Dairy Foods Association (IDFA) . “Overnight, we saw a paradigm shift and the business turned upside down.”

The lack of demand from the food service industry is so severe, it’s overshadowing the increase in demand at local grocery stores.

“We don’t have the data yet but will likely post record high and fluid milk consumption in the first quarter of 2020,” says Anna-Lisa Laca, editor of Farm Journal’s MILK. “Unfortunately, that’s not being offset by restaurant demand, and it’s not being offset by our lack of ability to export dairy products in a meaningful way at the moment.”

10% of U.S. Milk Without a Home

IDFA says with fewer restaurants and food services open for normal business, IDFA estimates 10% of the nation’s milk supply is without a home for the foreseeable future.

“That is staggering,” says Dykes. “I think the reason why you’re seeing the reports of dumped milk. This has happened so quickly that the markets can’t adjust.”

Finding a New Home for Lost Demand

Dykes says with the loss of essential demand, IDFA and other dairy groups are lobbying for dairy to be distributed to those who need it most, utilizing current government food programs, especially as unemployment rates grow to levels the U.S. hasn’t seen in nearly 100 years.

“We need to make sure that America’s food banks are replenished,” says Dykes. “When we look at what they’re suggesting, foods banks are buying 10 times as much food as they were on a six-month basis, from $50,000 to $500,000. They’re estimating they need $1.4 billion of food . So, we need to work with the U.S. Department of Agriculture to make sure that food in the food banks is there. Our industry has it, and Americans needed it.”

Dairy Groups Lobby for Programs to Help

While Dykes is in favor of government buying for both domestic and international food aid programs, he doesn’t want to see the government implement a program that artificially boosts prices short-term, acting as a wet blanket on the market later on.

“We don’t want to take actions today that put an overhang in the market,” says Dykes. “We don’t want to suffer the consequences for the next three years, so that we go through another three years like we just went through the last four or five years. Those kinds of programs may sound good on the surface, and we like it when someone’s buying, i.e. the government, but we don’t like it when the government holds on to it for a long time, and then when they start selling, it depresses the market for years.”

Short-Term Pain

While buying for food banks could help dairy find a new home for now, milk futures continue to be in a tailspin. Muted milk prices are putting immense financial pressure on dairy producers.

“We have to take this first 60 to 90 day window, which to me is going to be the toughest and the hardest to survive, and we need to think about the programs that can get money in producers’ pockets or get help and producers pockets as quickly as possible,” says Brown.

The Milk Supply is There

As short-term financial frustrations mount, Hartman and other producers are also frustrated with what they are seeing at some grocery stores. As they are dumping dairy down the drain, some retailers are limiting the amount of milk a shopper can buy during a time when the supply is there, and dairy leaders say logistics are working.

“If they’re being asked grocery store to only take one gallon of milk, I would get after the grocery store and say, ‘why am I allowed to get one gallon when dairy farmers are dumping milk,’” says Hartman. “Let’s take off those restrictions and let people buy as much milk as they can.”

Dykes agrees with urging retailers to remove restrictions on dairy. He says the supply is there and limits on buying aren’t necessary.

“Our members are getting the milk to the grocers,” says Dykes. “The milk is there. We need to remove those signs at any grocery store. There should be no limits on how much milk or any dairy product any consumer can purchase. It is available. Our members are getting it there, and our members are processing the milk.”

Dykes says the supply is there, as processors and food companies are going the extra mile to ensure dairy isn’t missing from refrigerators at any retail location. With COVID-19, he says that is no easy task.

“Our members are going above and beyond to make the make the product available,” says Dykes. “For example, if they weren’t doing three shifts a day, many of them have gone to three shifts, they’ve extended the hours and they are they’re maximizing the output through the plants, all the while preserving food safety. Our members are going above and beyond to make sure that the supply chain is has the product in it for the consumers.”

Mike North of Vault Ag thinks the panic buying has started to soften and agrees the limits on dairy should also disappear.

“I think the first couple days milk was like toilet paper, it went off the shelf and nobody could find anything anywhere,” says North. “Now that we have caught up to that, that is no longer the case and that sign can go away and should go away. Let’s face it; if somebody wants to walk in and buy three or four gallons of milk, let them do it, because on the other side of this, we are dumping milk and the reality is our processors are running around the clock right now doing everything they can to keep up with the demand where there is demand. And it’s for the retail space, and that is in the form of a gallon of milk. Take that sign down because the producer the producers are ready to put that on the shelf.”

Waning Outlooks

As those in the dairy industry lobby for more demand or financial help in other ways, outlooks from farmers are waning.

“At first, it looked like 2020 was going to be a pretty good year, and man did that turn on a dime,” says Hartman.

VanDieden says their family is cutting back on inputs, to try to feed their cows a little cheaper during this tough time. He and other producers are in survival mode, hoping better days for dairying are ahead.

“Since we are shortcutting supply, I believe on the backside of this it does start to open some doors for us to see some better prices,” says North. “Maybe 2020 finishes a lot better than it looks today; cross your fingers”

US--Election 2020-Rural Democrats

Fri, 20 Nov 2020 05:22:37 GMT

2020 Democrats try to make inroads in rural America 2020 Democrats try to make inroads in rural America By BILL BARROWAssociated Press The Associated Press DENMARK, S.C. DENMARK, S.C. (AP) — Deanna Miller Berry doesn’t often see presidential candidates. So when New Jersey Sen. Cory Booker recently came to Bamberg County, South Carolina, she was primed to unload about a contaminated water system.

“What is your plan to fix it?” Berry asked, her eyes narrowed.

Booker, former mayor of Newark, the largest city in the most densely populated state, assured Berry he cares about the 3,000 residents of Denmark, South Carolina. “This is a time in America where too many people are feeling left out, left behind, not included,” he said, promising “a massive infrastructure investment” targeting “forgotten” places.

The exchange highlights the effort by Democratic presidential candidates to make inroads in rural America. With the first contests unfolding next year in South Carolina, Iowa and New Hampshire, small-town voters will play a critical role in choosing the next Democratic nominee. And the early attention could help the eventual nominee be more conversant on rural issues and compete for votes in places that gave President Donald Trump his most intense support in 2016.

“Organizing in every precinct is the key to winning both the caucus and the general election in Iowa,” Iowa Democratic Chairman Troy Price said.

Vermont Sen. Bernie Sanders lamented rural decline during an Iowa swing this weekend.

“All over America, we have tragically seen more and more young people leave the small towns they grew up in, the small towns they love, because there are no decent-paying jobs in those towns — we intend to change that,” Sanders said, drawing cheers at the Iowa State Fairgrounds.

At the same time, California Sen. Kamala Harris was in small-town South Carolina advocating more spending on telemedicine, broadband internet and infrastructure. Booker used his two-day rural swing last month to talk health care, housing, infrastructure and criminal justice, among other issues. New York Sen. Kirsten Gillibrand was the first candidate who ventured to rural northern New Hampshire. Minnesota Sen. Amy Klobuchar has already visited a tiny town in Wisconsin, which will be a general election battleground.

Several candidates plan to attend a March 30 rural issues forum at Buena Vista University in Storm Lake, Iowa — population 10,600.

The approach matters most immediately because the delegates necessary to become the nominee are awarded in part from primary and caucus results in individual congressional districts, even the most rural and Republican-leaning. But investing there also could narrow Republicans’ general election margins, by increasing turnout among Democratic-friendly constituencies like rural black and Latino voters or peeling off white voters or both.

That could flip states like Iowa, Michigan, Pennsylvania, North Carolina — even Florida — that propelled Trump to an Electoral College majority. Besides helping win the presidency, rural gains would be necessary for Democrats to have the muscle on Capitol Hill to enact the kinds of sweeping policy changes they are advocating on many fronts.

“So much of this is about the margins,” Iowa’s Price said.

Beyond the politics, candidates say rural outreach is required of anyone who wants to govern a diverse nation.

“Folks want to be seen,” Harris said. “They want their issues to be heard. ... They could care less about half the stuff that gets covered on cable news networks.”

In Wisconsin, Klobuchar said, it’s “about knowing the issues that matter to people whether they’re Democrats, Republicans and independents — and in rural areas it’s not just about the farm bill.”

The 2018 midterms demonstrated Democrats’ tough realities beyond metro areas, but still offered some bright spots.

AP VoteCast, a national survey of more than 115,000 voters, found rural and small-town residents cast 35 percent of midterm ballots; 56 percent of those voted for Republican House candidates, compared to 41 percent for Democrats. The advantage was wider among small-town and rural whites: 30 percent of the electorate, tilting 63-35 for Republicans. Correspondingly, Democrats’ net 40-seat gain in the House was driven mostly by previously GOP-leaning suburban districts, while Democratic nominees fell short in more rural areas.

There’s no consensus on whether rural success for Democrats is about policy or personality or some combination. Some winners establish a personal brand at odds with the national party — West Virginia Sen. Joe Manchin defending the coal industry, Ohio Sen. Sherrod Brown opposing much of U.S. trade policy, Montana Sen. Jon Tester playing up his rancher credentials.

But that won’t necessarily work for a presidential candidate looking to become the face of a party with a decidedly liberal base. None of the declared candidates deviates from Democratic orthodoxy supporting abortion rights and LGBTQ civil rights and opposing Trump’s hard line on immigration — all positions that run afoul of rural and small-town voters who collectively are more culturally conservative than urban dwellers.

Sanders struggled with that balance in 2016 when Hillary Clinton hammered him for some Senate votes against gun measures that most Democrats backed. Sanders noted that many Vermonters, as in the rest of rural America, view guns differently than most big-city residents, but Clinton successfully used the issue against Sanders, particularly with black women.

Would-be Democratic presidents are left to mix economic arguments with biography.

Washington Gov. Jay Inslee grew up in Seattle, but he often mentions that he spent his early adult years in central Washington. He touts his signature issue — combating climate change — as a boon for the “heartland” economy by growing the clean-energy industry.

Klobuchar, a Twin Cities-area native, points to her work on the Senate Agriculture Committee and notes she’s won every congressional district in Minnesota during her Senate career. Sanders, who still speaks with his native Brooklyn inflection, drew roars in Iowa when mentioned using antitrust law to limit corporate power.

Harris notes that California — caricatured in Middle America as a bastion of coastal liberalism — has the nation’s biggest agricultural output. And in South Carolina, she said she heard a lot about jobs and state Republicans’ refusal to expand Medicaid insurance.

Massachusetts Sen. Elizabeth Warren notes that long before her Harvard law career, she was a child in Norman, Oklahoma, where her family’s working-class struggles shaped her liberal approach to consumer, labor and finance law.

After hearing Booker, Kenneth Belton, a 63-year-old resident of struggling Fairfield County, South Carolina, said a president doesn’t have to come from his walk of life. Belton just wants the person in the Oval Office to understand him — and then to help.

“It just feels like they’ve been ignoring us,” he said.

Berry, the clean water activist, agreed, crediting Booker and others for what she describes as first steps.

“I’ve heard enough to be inspired,” she said, pausing before adding, “enough to want to hear more.”

___

Associated Press writers Sara Burnett in Chicago, Alexandra Jaffe in Des Moines, Iowa, Meg Kinnard in North Charleston, South Carolina, and Hannah Fingerhut in Washington contributed to this report.

___

Follow Barrow on Twitter at https://twitter.com/BillBarrowAP.

Sources: Mexican Border is Expected to Open for Feeder Cattle Week of Jan. 20

Imports of feeder cattle from Mexico are expected to partially resume the week of Jan. 20, according to sources. Imports will be slow at first basis the need to implement and test new protocols. Live animal movements are expected to resume fully sometime after the initial reopening.

USDA’s Animal and Plant Health Inspection Service (APHIS) suspended imports of live cattle and bison from Mexico on Nov. 22, 2024, following the detection of New World screwworm (NWS) along Mexico’s southern border. This pest can have a significant negative impact on cattle health, and U.S. authorities have been working to develop protocols to screen animals coming into the country.

Several factors are influencing the timeline and pace of reopening:

Facility inspections: Both countries have agreed on protocols, but implementation requires facility inspections and approvals.
Quarantine period: A seven-day quarantine after animal checks
Port readiness: The most important port to get moving again is Santa Teresa, New Mexico.

The temporary suspension of cattle imports from Mexico has had notable effects on the U.S. cattle market:

Reduced supply: About 250,000-300,000 fewer head of cattle are estimated to have been imported due to the suspension.
Price support: The trade disruption has been supporting feeder cattle and calf prices in the U.S.

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Sources: Mexican Border is Expected to Open for Feeder Cattle Week of Jan. 20