Page 7 Monday, January 21, 2013 FarmWeek
Farm economy
Economist predicts drop in livestock production, higher prices BY DANIEL GRANT FarmWeek
Drought conditions in recent months eased or disappeared around most parts of Illinois. But the impact of the drought likely will continue to influence commodity markets this year and possibly into 2014, according to economists last week at the American Farm Bureau Federation annual meeting in Nashville. “With record-high feed costs and the drought, we’re producing less meat,” David Anderson, livestock economist at Texas A & M, told the RFD
‘We have one of the tightest supplies of cows in the past 50 years.’ — David Anderson Economist, Texas A & M
Radio Network. “We’ll produce less until prices go up enough to cover costs.” Anderson believes livestock feeders were hit the hardest by the drought as on-farm grain/forage production declined and commercial feed prices escalated.
Chicago Farmers to host farmland investment fair The Chicago Farmers’ farmland investment fair will be from 8 a.m. to 2:30 p.m. Saturday, Feb. 2, in Joliet Junior College’s Weitendorf Agricultural Education Center, Joliet. The early registration deadline is Saturday. This year’s fair will feature 18 seminars. In addition to the educational sessions, a diverse blend of exhibit booths will cover all aspects of buying and selling farmland. The early registration fee of $50 includes access to the exhibit hall, all breakout sessions, and lunch. After Saturday, the fee is $75. To register, call 312-388-3276, register online at {chicagofarmers.org} with a credit card, or download the brochure/registration form and mail with a check.
USDA last month reported the inventory of cattle on feed was down 6 percent from a year ago. “We have one of the tightest supplies of cows in the past 50 years,” Anderson said. “I look for a fairly substantial decline in beef production (4-6 percent) this year and, with that, some higher (retail beef and cattle) prices.” Anderson also looks for a small pull-back in hog production the first half of this year before higher prices encourage expansion of the hog herd the second half of 2013 and into 2014. Ron Plain, University of Missouri economist, recently predicted hog prices this year will average in the low $80s per hundredweight the first quarter and then jump to the low-$90s in the second and third quarters. USDA earlier this month
SOUTH AMERICA IS TAKING OUR PLACE. Scary thought, isn’t it? The good news is we can do something about it every time we choose a soybean variety to put into the ground. If we start getting closer to 35 percent protein and 19 percent oil, our beans would be a lot more attractive to domestic livestock producers and foreign markets—and we’d help stop the loss of export share to Brazil and other foreign competitors. It’s time to talk with your seed dealer or Certified Crop Adviser about protein and oil. Then visit VIPsoybeans.org to validate your seed selection and ilsoy.org for more information.
Cattle feeding is expected to decline in the U.S. this year due to dwindling herd numbers. Beef production as a result could decline by 4 to 6 percent, David Anderson, livestock economist at Texas A & M, told the RFD Radio Network. He predicted cattle prices will increase this year. (File photo by Ken Kashian)
lowered ending stocks of corn by 44 million bushels and of wheat by 38 million bushels. Ending stocks of soybeans were raised 5 million bushels but remain tight at 135 million bushels. Chad Hart, Iowa State University economist, believes tight crop supplies and higherthan-expected feed demand will keep pressure on crop/feed prices the first half of this year.
“There’s no doubt the drought was a major influence on the crop markets in 2012 (when prices raced to historic highs),” he said. “I’d argue that influence will continue as we look forward in 2013.” USDA this month increased its estimate of corn used for livestock feed by 300 million bushels to 4.5 billion bushels. USDA boosted its wheat feed estimate by 35 million bushels.