rain farmers may have been disappointed by the low crop prices in 2017, but American livestock producers might view those crop prices as advantageous.
Corn prices ranged from $2.85 to $3.55 per bushel, according to the December WASDE report, which means feed costs declined for hog, cattle and poultry producers.
As a result, U.S. animal agricultural production is estimated to rise 2 to 3 per cent in 2018 to over 100 billion pounds, according to Perdue University.
“Now that we’ve seen grain prices come down, profitability returned to much of animal agriculture,” Jim Mintert, an agricultural economist with Purdue University, said in a webinar on Friday. “We’ve rebuilt those sectors and have been expanding now continuously for four years in a row.”
Today’s lower grain prices could also lead to higher grain prices in the future.
As more animals consume more feed, grain producers will be called upon to meet the demand from livestock and poultry producers.
“Growth in animal agriculture means growth in feed usage, so that’s positive for grain prices in the longer term,” Mintert said. “And I don’t see that slowing down here in the next couple years.”
Another positive element for American livestock producers is the increase in meat consumption by American consumers.
Total U.S. red meat supply is estimated to rise by 1 or 2 percent, to between 215 and 220 lbs per capita, according to the university.
Poultry producers, in particular, may feel optimistic.
Poultry accounted for about 50 percent of total U.S. meat consumption in 2015, according to the USDA and Purdue University.
“U.S. consumers clearly have a strong preference to move their meat consumption towards poultry and we don’t see that slowing down,” Mintert said.
Other highlights from the webinar include:
- Ending stocks of corn are the highest they’ve been in 12 years,
- Ending stocks of soybeans are the highest they’ve been in 11 years,
- Corn prices could range from $3.65 to $3.85 per bushel this year
- Soybean prices could range from $9.40 to $10.40 per bushel this year, and
- Changing telationships with NAFTA partners and an America-first mentality could provide challenges for U.S. agriculture.
(Source – https://www.agrimoney.com/news/improving-uk-farm-incomes-us-cattle-prices-boost-carrs-49087)