Feed prices for the futureDoes May bring flowers … or more showers? The question of whether April showers continue into May will become important in terms of crop production. The next few weeks will determine whether planting intentions for major crops will be realized. From a feed perspective, there appear to be ample supplies and production potential to maintain attractive concentrate feed prices for the foreseeable future.
From a forage perspective, excellent moisture conditions suggest tremendous pasture and hay potential. The latest Drought Monitor shows the least amount of dry conditions across the country since the Drought Monitor began in 2000. The upcoming May Crop Production report from USDA-NASS will likely show that May 1 hay stocks are low following reduced Dec. 1 hay stocks and cold, wet conditions affecting cattle production this past winter. However, good hay production prospects for 2019 alleviate much of the concern about end of crop year stock levels as the 2019 hay crop year begins.
Beyond the weather, seasonal supply and demand conditions will influence cattle and beef markets in May. Beef production grows seasonally from April to June on the heels of seasonal peaks in steer slaughter in June. Total beef production actually peaks in October with seasonal peaks in heifer and cow slaughter added to steer slaughter. Steer and heifer carcass weights are approaching the seasonal low in May before climbing to a peak this fall. At this time, steer and heifer carcass weights are close to year ago levels after being lower for the year to date, largely as a result of weather impacts. Fed cattle prices are currently at or just past the seasonal peak this spring and typically decline to late summer lows.
Boxed beef prices typically peak in May, driven by summer grilling demand. Rib and Loin primal prices are seasonally high at this time while Chuck and Round primal prices are seasonally soft in the summer before increasing in the fall. Beef exports in the coming months may impact these seasonal patterns, in particular to moderate the summer lows for Chuck product prices, which are seeing growing export demand.
Prices for lightweight calves and stockers are likely at or just past the seasonal peak. Good but slow developing forage conditions this spring have spurred strong grazing demand and maintained calf prices near the seasonal peak through April. Prices for big feeder cattle typically increase from early spring lows and push steadily higher to late summer price peaks.
Cull cow prices have been quite erratic this year, spiking up seasonally a couple of times but falling back each time reflecting variability in the ground beef market. The ground beef market has been quite dynamic for several months with changes in both supply and demand conditions.
With the exception of the cull-cow market, cattle and beef markets are behaving seasonally with little underlying trend in most markets. All in all, we are seeing the most stable cattle and beef markets in many years. Until or unless outside shocks rise up to impact supply or demand conditions, expect cattle and beef markets to remain pretty calm in the coming months.
Derrell Peel, Oklahoma State University
Restructure loans, boost collateralBanks that serve U.S. farmers are increasingly restructuring existing loans and boosting the collateral needed for new ones as the numbers of late and missed payments have risen.
While regional banks are healthy, they’re clearly boosting their defenses against the risks they face. In March, a report by First Midwest Bank in Chicago showed past-due agricultural loans up 287 percent in 2018 over the previous year. Meanwhile, cases handled by the Iowa Mediation Serviceinvolving farmers unable to make payments rose 20 percent. Banks that serve U.S. farmers are increasingly restructuring existing loans and boosting the collateral needed for new ones as the numbers of late and missed payments have risen.
While regional banks are healthy, they’re clearly boosting their defenses against the risks they face. In March, a report by First Midwest Bank in Chicago showed past-due agricultural loans up 287 percent in 2018 over the previous year. Meanwhile, cases handled by the Iowa Mediation Serviceinvolving farmers unable to make payments rose 20 percent.
Farmer bankruptcies in six Midwest states rose 30 percent to 103 in 2018, according to the Federal Reserve Bank of Minneapolis. To hold back the tide, Farmers National Bank in Prophetstown, Illinois, is restructuring more and more loans to keep growers solvent while trimming the bank’s own risk. Farmer incomes are down 11 percent since 2010 and expenses are up 31 percent, as crop prices have fallen and a trade war with China has cut demand. Meanwhile, Midwest floods have wiped out some growers, and left others with planting delays and drowned supplies.
Double down on Florida hopsNot that long ago, the idea of farm fresh Florida hops was nothing but a fantasy floating at the bottom of a pint glass. Today, excitement around the alternative crop is bubbling over. But with the increase of production, getting the crop to brewers that can use them unprocessed can be a challenge.
No doubt, Florida-grown hops have been a big hit with local brewers who are lucky enough to get their hands on them. Wet hops can be used in any style, adding a complexity you can’t find with other hop products. But more than just boasting a distinct product, having access to locally grown, fresh hops is fueling a new culture, which in turn is driving business.
Establishing hop production in Florida is one thing. Taking any alternative crop to the next level of larger commercial success is another. Advancements in research addressing increased yields and plant health also are helping pave the way for new possibilities. Regardless of all the progress being made in yield production, and even new variety development, the lack of processing infrastructure in Florida and increased knowledge of postharvest activities still pose massive barriers to entry for the budding industry.
Paul Rusnak is senior managing online editor of Florida Grower, American Vegetable Grower, American Fruit Grower and Greenhouse Grower magazines.
AI outsmart greatest enemy?Asian citrus psyllids are small, but they have had a huge impact on global citrus production via spreading the deadly citrus greening disease. A group of scientists in Florida claim to have come up with a new citrus psyllid scouting system that saves growers time and money.
A new study published in the journal Computers and Electronics in Agriculture points to precision agriculture technology as a way to help improve and enhance this psyllid scouting process. A team of scientists used AI equipment to take images of trees, fruit, and the insects in local citrus groves. AI has the ability to distinguish between psyllids and other insect pests. The machine consists of a tapping mechanism to strike selected branches and a board with a grid of cameras that take pictures. Then, an AI-based algorithm analyzes the images, detects, counts, and finds the falling adult psyllids.
The study shows from experiments in a grove, psyllids were detected with 90 percent accuracy.
Losing grip on American food dollarAccording to a report recently released by the USDA’s Economic Research Service, U.S. farmers and ranchers earn just 14.6 cents for every dollar American consumers spend on food. This value marks a 17 percent drop since 2011 and marks the smallest portion of the American food dollar that farmers have received since the USDA began reporting this data in 1993. The remaining 85.4 cents cover off-farm costs, including processing, wholesaling, distribution, marketing, and retailing.
“Even though family farmers and ranchers are more productive today than they have ever been, they’re taking home a smaller and smaller portion of the American food dollar. This one data point doesn’t paint the full picture of the farm economy, but when considered in the context of depressed commodity prices, plummeting incomes, rising input costs, and deteriorating credit conditions, it is certainly clear that we are in the midst of an agricultural financial crisis,” National Farmers Union president Roger Johnson said in a statement. “Conditions for farmers have been eroding since 2011, and there’s only so much longer they can hold on. Many have already made the heartbreaking decision to close up shop; in just the past five years, the United States lost upward of 70,000 farm operations. As a country with a growing population and growing nutritional needs, we can’t afford to lose many more. We sincerely hope this startling report will open policymakers’ eyes to the financial challenges family farmers and ranchers endure on a daily basis and convince them to provide the support they so desperately need.”
Christina Herrick is senior editor of American Fruit Grower magazine and Western Fruit Grower magazine.
Florida watermelon nectarIngredients
5 cups Florida watermelon (seeded and cubed)
1 lime, juiced
Thin-sliced watermelon for garnish
Add watermelon cubes and lime juice to a blender and process until smooth. Strain puree through a fine sieve. Chill and serve cold, garnished with thin-sliced watermelon.