News Update
January 13, 2012
Record 2011 Profits in Agriculture Could Stumble in 2012
Against a backdrop of economic uncertainty, U.S. agriculture last year stood as a shining example of growth.
2011 set records, with net farm income topping $100 billion for the first time ever.
“Prices are up across the board for all the major crops, and while we’ve seen cost of production increases overall, they haven’t increased as rapidly as the prices of crops people are selling,” said Pat Westhoff, director of the University of Missouri Food and Agricultural Policy Research Institute (FAPRI). “Even corrected for inflation, farm profits are at or near the highest levels since the 1970s. That is indeed a very good outcome overall.”
U.S. farm income rose 28% in 2011 compared to the previous year, according to USDA reports. Record agricultural exports topped $137 billion, while crop receipts rose 16% and livestock sales receipts averaged 17% more than in 2010.
For livestock producers, this year offers welcome relief from some tough times. When the economic recession hit prices dropped sharply as demand for meat slumped, and high feed prices meant many livestock producers lost money. In response, some producers stopped raising livestock and others scaled back expansion plans. Westhoff said we’re now seeing a turnaround.
“We’ve seen higher prices for both hogs and cattle this year in a pretty sharp way after really tough years in 2008-2009,” he said. “Now we’re seeing a bit stronger demand for our meat overseas and at the same time we’ve got less supply.
“Events like the drought in Texas have reduced cattle numbers, so there will be less beef to be sold in 2012 that will help keep cattle prices high ahead of us for the next several years.”
Going into 2012, chicken producers won’t be as lucky. Demand for chicken meat has not kept pace with the appetite for red meat, and there is an expectation that chicken production will consolidate soon.
“That’s causing talk of lower chicken production in 2012, and that’s something that doesn’t happen very often,” Westhoff said.
Crop exports likely will fall short of last year. With less droughts and floods affecting foreign yields, competition will ramp up once again.
“Less soybeans, less corn, less wheat almost certainly will be exported in the current marketing year than last year,” Westhoff said. “It’s not that demand is necessarily weak, it’s just lots of other countries are supplying those foreign markets.”
It’s hard to guess whether 2012 will bring another round of high prices, but higher yields, weaker exports and even the European debt crisis could hinder a repeat.
“There are lots of things that could go wrong in front of us, and instead of $5-$6 corn, $3-$4 corn could return,” Westhoff said. “We’re very much in a volatile situation, and what people think about the markets today will be different than six months or a year from now.”
November Pork Exports Record-Large;
Beef Exports Also Strong
U.S. pork exports set another monthly volume record in November, according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF), which helped offset record-high production and provided a significant boost to pork cutout values. Exports totaled 217,080 metric tons valued at $597.85 million — up 22.5% and 35%, respectively, over November 2010. This boosted the January-November volume total to 2.04 million metric tons (up 18% year-over-year) and the value total to $5.526 billion (up 27%). This puts U.S. pork export value, which had never reached $5 billion before this year, on pace to approach the $6 billion mark in 2011.
November beef exports reached 105,268 metric tons valued at $456.25 million. This was steady with the October 2011 volume and up slightly in value. On a year-over-year basis, November exports were up 4% in volume and 17% higher in value from the very strong totals recorded in November 2010. This boosted the January-November export total 22% percent higher in volume than a year ago to 1.179 million metric tons, and up 35% percent in value to $4.944 billion. When December results become available, beef export value will eclipse the $5 billion mark for the first time ever.
For further detail, see the full release on the Marketing page of the February Angus Beef Bulletin EXTRA, which will email next week. To subscribe to the electronic magazine, send your subscription request to bulletinextra@angusbeefbulletin.com.
Lowest-Cost Registration Deadline Looms
for 2012 Oklahoma No-Till Conference
Farmers and ranchers seeking to benefit from the latest developments in no-till cropping systems have until Feb. 10 to receive the lowest cost for attending the Feb. 21-22 Oklahoma No-Till Conference in Norman.
“A key advantage of attending the conference is the opportunity to interact with both technical specialists and experienced no-till farmers,” said Chad Godsey, Oklahoma State University (OSU) Cooperative Extension cropping systems specialist. “It’s a great way for producers to get answers to any number of questions they may have about no-till systems.”
The conference will take place at Norman’s National Center for Employee Development (NCED), located at 2801 State Highway 9 East. Conference sessions will begin at 8 a.m. on both days and will finish mid- to late-afternoon.
Cost of attending the conference is $110 per person if registering by Feb. 10, and $125 per person thereafter. Reservation information and a detailed agenda is available at http://notill.okstate.edu online. To register, please visit https://adobeformscentral.com/?f+0RflPoWCsiop2H7K82r7MA online.
“We plan to hold the conference even in the event of snow or other normal winter weather; it takes something historically intense like the blizzard last February to knock us off schedule,” Godsey said. “Participants will need to print the completed registration form and mail it with a check or money order to the address indicated.”
Session topics will focus on forage-based no-till cropping systems, equipment, crop rotation, intensive wheat management, grain sorghum production, herbicide management, no-till canola and soil biology.
“We’ll also be providing farm program and industry updates,” Godsey said. “Think of the conference as one-stop shopping for the latest information about no-till. We’ll be using a combination of general and breakout sessions to allow participants as much choice as possible in attending sessions of greatest interest to them.”
Sponsors for the 2012 conference include OSU’s Division of Agricultural Sciences and National Resources, the Natural Resource Conservation Service, the Oklahoma Conservation Commission, Producers Cooperative Oil Mill, Sorghum Partners, Agro-culture Liquid Fertilizers and P&K Equipment.
The registration fee does not cover the cost of hotel accommodations. For persons wishing to stay at the NCED, mention the Oklahoma No-Till 2012 Conference to get the conference rate of $77 per night.
“Please make your reservations early, as there are a limited number of rooms available,” Godsey said.
For reservations, contact the NCED online at http://www.nced.com or by phone at 405-447-9000, extension zero.
NCBA Op-Ed: Double Deck Trailer Ban in Highway Bill
Unfortunately, the U.S. Senate Committee on Commerce, Science and Transportation recently included the double deck trailer ban in S. 1950, the Commercial Motor Vehicle Enhancement Act of 2011. Section 905 of S. 1950 prohibits the transportation of all horses in double deck trailers, not just those bound for slaughter. This measure is currently waiting for further consideration on the Senate floor. The U.S. House Committee on Transportation and Infrastructure will likely mark up its version of the Highway Bill in early February.
You may be curious as to why Congress is trying to expand this provision. This issue has been a strong interest of Senator Kirk (R-Ill.). While Senator Kirk was serving in the U.S. House of Representatives, he stated he introduced this legislation after an accident in Wadsworth, Ill., in October 2007 involving the overturning of a double deck trailer carrying 59 Belgian draft horses. According to accident reports, the driver ran a red light causing the accident. Several other accidents cited in background information supporting the ban were caused by driver error. Unfortunate accidents such as this remind those transporting livestock that continued education on transportation safety is vital. The welfare of the livestock we are transporting is our top priority and we must communicate this fact and not allow special interest groups to destroy our industries.
The U.S. Department of Agriculture currently regulates the transport of horses to slaughter and recently strengthened those regulations, but there are currently no other federal regulations on horse transportation. Passage of this provision would possibly lead to further restrictions on livestock transportation.
Rodeo stock contractors stand to suffer adverse effects if a ban on transporting in double deck trailers is imposed. The rodeo industry actively opposes the ban with the following facts:
While transporting horses and all livestock, the main goal should always be the safety of the trailer (i.e. headroom, road worthiness, etc.). As with any form of transportation, accidents may happen and the focus of any potential legislation should be on safe transport, rather than the banning one specialized form of transportation.
Stock contractors transport rodeo horses in double deck trailers that are specially ordered or specially modified in order to safely transport horses. These modifications may include changes made to ramps and doorways to safely accommodate horses.
Rodeo horses must be fit and able to perform when they arrive at their destination. Thousands of horses are successfully hauled each year in specially modified double deck trucks.
Many stock contractors have one level created with a higher clearance [up to 84 inches (in.)]. The level with the lower floor-to-ceiling clearance is used to haul timed event cattle or bulls.
The average height of a horse is approximately 60 in. Floor-to-ceiling clearance in most double level trailers used to haul bucking horses ranges from 71 in. to 75 in. This leaves from 11 in. to 15 in. of headroom for the average horse in these modified trailers, and that is more than adequate.
Taller rodeo horses are transported in the single level areas at the front and back of the modified trailers which may have up to 9 feet (ft.) of floor-to-ceiling clearance.
The majority of bucking horses used in professional rodeos today come from breeding programs where they are specifically bred to buck. These horses are conditioned to riding in specially modified double level trailers from a young age.
We must stand together and educate our representatives in Congress on the negative consequences of this legislation. Please start today by contacting your elected officials in Congress and urging them to oppose provisions in the Highway Bill that prohibit the transport of horses in double deck trailers.
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