Most of America’s ranchers are closing the books on a banner year. Stocker and feeder prices hit all-time price highs this fall at a time when prices normally see pressure from heavy supplies.
As good as the markets have been, next year could be even better. Can prices really improve next year? You bet, say most market analysts. That’s because cattle market fundamentals are shaping up to deliver even smaller supplies and high demand.
The primary factor driving a rosy 2014 cattle outlook is lower grain prices. It’s no coincidence that as corn prices declined to three-year-lows this fall, cattle prices experienced an unprecedented rally. Stocker and feeder cattle prices rose 25% to 30% since May, boosting the feeder cattle index price for 750-lb. steers to more than $165 per cwt.
Falling corn prices also provided a much-needed boost for feedlot operators. After two years of negative margins, cattle feeders began printing closeouts with black ink again in late October.
According to John Nalivka, president of Sterling Marketing Inc. in Vale, Ore., feedyards saw average profits of nearly $123 per head for cattle sold in the first week in November. That’s a dramatic turnaround from the $32 per head they lost on cattle last year. He adds average feed costs per head were $172 lower in November 2013 than November 2012.
Although some parts of cattle country remain locked in drought conditions, most cattle producers saw improved weather conditions during 2013. Rainfall totals closer to regional averages produced much needed hay and forage, further reducing production costs.
Cheaper costs of production always provide opportunities for profit, but shrinking supplies of feeder cattle will support demand. It’s nearly a certainty, analysts say, that the U.S beef cow herd will be smaller when USDA releases its annual inventory report next year. That will be the eighth consecutive year of cow herd decline—a guarantee that calf supplies will shrink.
Feedyards and stocker operators will aggressively seek cattle in all weight ranges next year, which will keep calf producers in the driver’s seat. With calf and yearling prices already high, analysts suggest that new records could be set again next year.
On top of the positive supply and demand outlook, the beef industry continues to enjoy the rewards of a robust export market. The U.S. Meat Export Federation (USMEF) says in the first eight months of 2013, beef exports were up 1% in volume and 10% in value—to 767,017 metric tons valued at $4.01 billion. USMEF says the export value per head of fed slaughter beef in August averaged $253.87, up $46.16 from last year. Demand for U.S. beef is expected to remain strong next year, as well.
With the fundamentals shaping up in your favor, 2014 is not the time to cut corners. Do everything you can to make your calf crop as healthy and attractive as possible. Here’s to a banner 2014!
Editorial Director, Beef Today, writes from Mission, Kan.
The statistics are sobering. Today and every day, an average of 243 agricultural workers will suffer a lost-work-time injury, with 5% of these injuries resulting in permanent impairment. In the past decade, about 6,000 people have died from on-farm accidents.
According to the Association for Unmanned Vehicle Systems International, one change could cut that terrible trend in half. The group predicts a massive switch to robots and unmanned vehicles could prevent 2,900 deaths over the next 10 years.
This makes sense. Tractor rollovers are by far the most common fatal accident on the farm. Removing the driver removes the chance of a fatality.
Could there be a future in robotic, driverless machines on the farm? The industry sees value in it—John Deere, Case IH, Fendt, Kinze and others are working on autonomous projects.
Food futurist Christophe Pelletier stretches this idea even further.
"We might not need tractors at all," he says. "The implements may drive themselves someday. The future of farm machinery seems simple—it will be all about computers and sensors."
Sensors are already being deployed to great effect in the automotive industry, Pelletier says, and there’s every reason to assume these innovations will trickle into the agriculture industry over time. Automatic braking is one of many examples of sensor-based safety, he says.
Sensors are also playing a large role in grain bin technology. Even today, farmers can buy temperature and moisture cables, says Jeff Decker, product safety manager with Grain Systems Inc. While the primary function is to monitor the grain and keep it in prime condition, Decker says there is absolutely a safety implication, as well.
Thanks to emerging research of biometric sensors, you will even be able to monitor any number of vitals for your livestock or even yourself, including heart rate, blood pressure, cholesterol and more. Imagine the value, for example, of being able to detect an imminent heart attack or stroke before it happens and getting the proper medical treatment as quickly as possible.
Rapid response. Even with these safety advancements, accidents are bound to happen. That has researchers investigating ways to speed up the response time once accidents do occur.
As more local law enforcements acquire drones, that technology could be deployed for faster search and rescue missions. A so-called "lifeguard drone" is being tested in the Caspian Sea that not only finds stranded swimmers but also delivers flotation devices to them. Applied to the agriculture industry, drones could deliver a defibrillator, first-aid kit or other medical assistance to an injured farmer before medics arrive.
Another example of speeding up medical response is a University of Missouri mobile app in beta testing.
"It monitors how stable the tractor or vehicle is during its operation," says Bulent Koc, University of Missouri assistant professor of agricultural systems management. "If the operation becomes dangerous or unstable, it shows warning messages to the operator."
As of early November, nearly 60% of farmers have yet to buy seed for 2014
A late harvest leads to lots of lingering decisions, particularly with timing of input purchases. In an early November Farm Journal Pulse, more than 1,400 farmers answered the question: What percent of your 2014 seed needs have you booked or purchased?
Slightly more than 40% of respondents had not booked or purchased any of their seed, while 24% had all of their seed needs purchased.
The situation is much different than fall 2012 when the Farm Journal Pulse polled farmers with the question: When do you plan to purchase seed corn hybrids for your 2013 crop? Results from 1,400 votes showed the majority of seed purchases happened prior to the first of the year.
Here are the full results on when farmers said they planned to purchase corn seed last year for the 2013 crop:
While the 2012 Farm Journal Pulse only addressed corn seed, it suggests that farmers are a little more gun-shy about purchasing seed this year.
Add your vote. To join this farmer panel and make your voice heard, go to www.FarmJournalPulse.com or text "Pulse" to 46786. Farm Journal, in partnership with Commodity Update, will text you two quick poll questions per month. Text back your response, and the results are tallied and displayed in an interactive map by the next day. If you have suggestions for poll questions, e-mail them to FJPulse@farmjournal.com.
In an exclusive interview, Howard W. (left) and Howard G. Buffett share how U.S. farmers can play an important role in fighting hunger, which is the focus of their new book, “40 Chances: Finding Hope in a Hungry World.”
A fresh take on solving global food insecurity
If you were given billions of dollars to improve the world, what would you do? While this is a hypothetical question for most, Decatur, Ill., farmer and philanthropist Howard G. Buffett was given this incredible opportunity, and he hasn’t taken it lightly.
Buffett’s father, Warren Buffett (the fourth richest person in the world) told him in 2006 that he was leaving most of his fortune to philanthropy—and that Howard G. would receive $3 billion to accomplish something great. He chose to face global hunger head on. While Howard G. wants the most vulnerable people on the planet to be well fed, he is approaching the challenge like the Illinois farmer he is proud to be.
Knowing that most folks have 40 chances to accomplish their life’s goals, Howard G. set an ambitious 40-year deadline for alleviating global hunger.
Reasons to hope. In his new book, "40 Chances: Finding Hope in a Hungry World," Howard G. and his son, Howard W. Buffett, share 40 inspiring stories related to the world’s hunger issues. The book speaks to every person wanting to make a difference—and provides actionable steps.
During the next four decades, he expects his namesake organization, the Howard G. Buffett Foundation, to take risks, keep a long view and focus on solutions that sustain success. With this mindset, the foundation is sure to make some mistakes but will keep pushing forward for real progress.
"We need people to quit thinking so hard and start doing more," he says. "Hunger is complicated, but there are things that work. You can change people’s lives, sometimes with very little."
Howard W., a trustee for the foundation and lecturer in international and public affairs at Columbia University, says a common mistake he’s seen in many philanthropic efforts is the
assumption that what works in the developed world, primarily the U.S., will work across the globe.
In many underdeveloped countries, the majority of farmers can’t own land, don’t have access to new technology and there’s no established land-grant university system. "Many organizations use a template that is decades old: gather aid, deliver aid, leave a few years later," Howard W. says. While that provides short-term relief, it won’t solve poverty in the long-run.
A farmer’s eye. The first thing Howard G. does when he visits a new place (he’s traveled to 130 countries) is to rub the soil between his fingers.
"Soil is a farmer’s most valuable working capital," Howard G. explains. "Great civilizations have failed because they have not taken care of their soil."
Howard G. hopes U.S. farmers, who he says have done more than anyone in the world to feed the hungry, continue to adopt soil conservation methods such as no-till and cover crops.
It’s been a long time coming. The corn market has finally seen some positive technical support.
After piles and piles of negative news, the corn market showed a little glimmer of hope this week.
From a technical standpoint, Jerry Gulke, president of the Gulke Group, says the corn market made a positive move.
"This week, in March corn, we took out last week’s lows and also touched $4.10 again," he says. "In response, we have lifted all of our hedges, which may come as a surprise."
Hear Gulke's full audio analysis:
Overall, Gulke says the grain markets have digested a lot of negative news recently – everything from China rejecting some GMO corn and the acknowledgment the 2013 crop was huge. "We think, at this point, we have discounted all of the negative news," he says.
To gain some perspective on the current market situation, Gulke and his colleagues have researched the grain market movements at this time of the year in 2008.
"That year was very similar to now," he says. "In December 2008, we had 100% of our old-crop corn sold and about 80% to 90% of our 2009 corn sold because of the financial debacle and the liquidity crisis. The market was negative, just like this year."
He says they lifted their hedges. Then, the market rallied from around Dec. 5 to Jan. 6, by about $1.20. Gulke says in 2008, prices were around $3.50. "We rallied into January, but the January report was the final nail in the coffin. We didn’t close higher again for 2009 corn in 2009."
Between now and the end of the year, Gulke says trading is pretty light. "A lot of people don’t want to have positions on," he says.
The Cissna Park and Crescent-Iroquois Ag Hall-of-Fame is a new creation this year. And the annual Cissna Park FFA Scholarship Auction today (Sat) will feature the first inductees into the Hall-of-Fame.
Today's dinner and auction is from 4-6 pm at the Cissna Park High School gym.
John Terrell (Tear-O) is FFA President. He says 15 FFA alumni will be honored...
All proceeds from the event benefit the FFA chapter.
Tyler Loschen's father is a former agriculture teacher and his mother was his agriculture teacher and FFA advisor in high school. So naturally, he believes that he was predestined to be a part of FFA.
The Illinois FFA member always had a strong desire to farm, developed no doubt from early days of playing with farm toys as a young child to spending summertime weeks with two sets of grandparents that farmed as a youth. But since his parents didn't farm, he knew that if he wanted to follow his dream, he'd have to carve his own path.
As a middle-school student, he studied livestock and became very involved in livestock judging. After joining FFA his freshman year, Loschen began a supervised agriculture experience in corn and soybean production. He eventually achieved one of his long-term goals by buying 40 acres of farmland.
Since, he has bought a combine, tractor, planter and other equipment needed to produce and harvest crops. He has made tough financial and management decisions along the way as he grows his farm's profitability and works to minimize financial risk.
"I feel very fortunate that my experiences in FFA have laid the foundation for my future," Loschen said. "I've faced the late, wet fall of 2009 and the drought of 2012. I've experienced the challenges of high feed prices and herd health issues and I have persevered. It is the result of these challenges that drive my passion for production agriculture while providing food for an ever-growing population."
Tyler Loschen was honored Saturday 10/2/13 with the prestigious FFA American Star Farmer award.
Loschen was a 2013 finalist for an American Star Farmer award from the National FFA Organization. Each year at the National FFA Convention & Expo, four FFA members are honored with an American Star award for outstanding accomplishments in FFA and agricultural education. The award is the most prestigious honor awarded to a student by the National FFA Organization.
The American Star awards – including the American Star Farmer, American Star in Agribusiness, American Star in Agricultural Placement and American Star in Agriscience – are awarded to FFA members who demonstrate outstanding agricultural skills and competencies through completion of a supervised agricultural experience. A required activity in FFA, a supervised agriculture experience allows students to learn by doing by either owning and operating an agricultural business, working or serving an internship at an agriculture-based business or conducting an agriculture-based scientific experiment and reporting results.
Other requirements to achieve the award include demonstrating top management skills; completing key agricultural education, scholastic and leadership requirements; and earning an American FFA Degree, the organization's highest level of student accomplishment. Sixteen American Star award finalists from throughout the U.S. are nominated for a panel of judges to interview during convention. Four are named winners and receive cash awards totaling $4,000. All American Star finalists receive a $2,000 cash award. The Stars Over America are sponsored by ADM Crop Risk Services; CASE IH; DuPont Pioneer; Elanco; Farm Credit and Syngenta as a special project of the National FFA Foundation.
Loschen, 21, a member of the Tri-Point High School FFA chapter in Cullom, Ill., has earned a host of state and national FFA awards, including Star Farmer of Illinois, national proficiency awards in diversified agriculture, diversified crop production and chapter Greenhand and Workhorse awards. He served as president, vice president and Greenhand president of his local FFA chapter.
He is the son of Gary and Diana Loschen, who is his FFA chapter advisor.
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About National FFA Organization The National FFA Organization is a national youth organization of 557,318 student members as part of 7,498 local FFA chapters in all 50 states, Puerto Rico and the Virgin Islands. The FFA mission is to make a positive difference in the lives of students by developing their potential for premier leadership, personal growth and career success through agricultural education. The National FFA Organization operates under a federal charter granted by the 81st United States Congress and it is an integral part of public instruction in agriculture. The U.S. Department of Education provides leadership and helps set direction for FFA as a service to state and local agricultural education programs. For more, visit the National FFA Organization online at www.FFA.org, on Facebook, Twitter and the official National FFA Organization blog.
Officials are encouraging you to safely get rid of your old or unwanted medications today (Saturday).
The effort is a part of National Prescription Drug Take Back Day, which runs from 10 a.m. to 2 p.m. Select pharmacies are participating. You can drop off your old/unused medications for safe disposal. Area police and some fire departments also welcome the public to dispose of the old meds at their facilities. There's planned drop-off program today at Northfield Square Mall in Bradley. Police in Kankakee, Bradley and Bourbonnais are involved in the 'Take Back" effort.
Two locations are also available in Vermilion County: the CVS Pharmacy and county courthouse, both located on Vermilion Street.
For all there is to see at the Farm Progress Show in Decatur next week, something big will be missing.
"The 96-day corn hybrids that we plant here typically would be ready (to harvest at the show), if we have a normal heat cycle through the summer," says Matt Jungmann, the show's manager. "Unfortunately, we've had an unseasonably cool summer, and the corn was never able to catch up and mature.
In our sixty-year history, this is the first time we haven't been able to harvest because the corn's not ready."
The site at Richland Community College has expanded but still is not big enough to hold all of the exhibitors, the newest of which will be on a grassy area adjacent to Progress City USA.
More than 100,000 visitors are expected from throughout the U. S. – and more than three dozen other countries. The show alternates between Decatur and a site in Iowa.
INDIANAPOLIS - The U.S. Department of Agriculture on Monday (Aug. 12) predicted the nation's largest corn crop in history and the third largest soybean crop - a stark contrast from a year ago when crops were devastated by drought.
In its annual August crop production report, the USDA's National Agricultural Statistics Service projected a national corn crop of 13.8 billion bushels on 154.4 bushels per acre - a 28 percent increase over last year's 10.7 billion bushels. The previous record was 13.09 billion in 2009.
Soybeans are projected at 3.26 billion bushels on a yield of 42.6 bushels per acre, up 8 percent from last year's crop of 3 billion bushels.
The drought reduced last year's corn harvest to its lowest level since 10 million bushels in 2003, and the average bushels per acre was the lowest since 113.5 in 1995.
"To say what a difference a year makes is a huge understatement. It's a big difference this year," said Jay Akridge, Glenn W. Sample Dean of Purdue Agriculture, at the Indiana State Fair, where a panel of agricultural experts analyzed the report, which offers the first look at expected harvests for 2013. Purdue Extension organized the panel.
Akridge, who moderated the panel, noted in his opening remarks that the report "sets up potential for a huge crop."
Panelists were Purdue Extension agricultural economist Chris Hurt, Purdue Extension agronomists Bob Nielsen and Shaun Casteel, Indiana State Department of Agriculture Director Gina Sheets and USDA-NASS Indiana State Statistician Greg Matli.
"We have a lot more grain this year, which will get much of the industry back to work," Hurt said. "The much bigger crop has producers and agronomists smiling, but the economists are not smiling. A larger crop means lower prices."
While those lower prices could mean lower farm incomes, they also could offer some good news to food consumers. Prices of raw ingredients will be down, meaning retail food-price increases could moderate to less than the rate of inflation, Hurt said.
In Indiana, USDA expects corn farmers to produce just shy of 1 billion bushels at 979.4 million, compared with 596.9 million bushels in 2012.
About two-thirds of the state's corn is rated good to excellent, which is welcome news to growers this late in the season, said Nielsen, corn specialist. "Half of Indiana's corn crop was planted after the 15th of May, which is the third latest in the last 10 years," he said. "But we've learned that the planting date is not always a direct predictor of yield."
According to Nielsen, Indiana corn development is about 1-2 weeks behind schedule, but moderate temperatures and timely rainfall meant the crop pollinated with little environmental stress.
The story is similar for the state's soybean crop, said Casteel, soybean specialist. Planting was delayed, but farmers made up ground and had most of the state's soybeans in the ground within 2-3 weeks in May.
USDA expects Indiana soybean growers to produce 261.5 million bushels, up from 223.5 million bushels in 2012. "Right now, soybean development is about a week behind, but we are set for good seed fill if we get the weather to finish it out," Casteel said.
In fact, with continuing moderate temperatures and timely rains, Hurt, Nielsen and Casteel agreed that yields could be higher than what USDA is predicting - especially since the department's numbers are based on grower surveys compiled before Aug. 1.
"This creates an opportunity to create value for the state of Indiana, " Sheets said.
The full report can be downloaded at http://www.nass.usda.gov.