By Ann Johanns–Iowa State University Extension and Outreach
AMES, Iowa – Crop and livestock producers can get a look at where markets are headed in the February edition of the Ag Decision Maker.
A wealth of resources are available, including an article by Chad Hart, professor in economics and extension grain markets specialist at Iowa State, on how the South American drought is impacting crop production; and an article by Lee Schulz, associate professor in economics and livestock economist at Iowa State, on the expansion of Iowa’s beef herd. Note: The articles were written prior to the military escalation by Russia, which has and will have significant implications for agricultural markets, in general, boosting crop futures prices and lowering livestock futures prices.
Information files on livestock basis levels in Iowa, and historical livestock prices, are also available.
The United States Department of Agriculture shows additional downward movement on South American crop production, according to the February report, and crop prices are rising.
Futures prices show strength well into 2024, with corn futures above $5 and soybean futures above $12.50. While crop prices have remained strong enough to cover inputs and provide some solid profit opportunities, Hart said producers should remember what happened back in 2013.
“This situation reminds me a lot of the 2013 marketing year, when we began the year with strong prices and profit windows, but we ended the year with lower prices and challenging returns,” he said. “While I hope we do not repeat that, it is a good reminder that now is a great time to put a marketing plan in place to capture and protect the healthy returns markets are offering.”
In his article titled “Iowa’s beef cow herd is off and running,” Schulz says Iowa now ranks 10th in beef cows, up from 13th a year ago. The state’s 925,000 beef cows is an increase of 65,000 head from last year – the largest gain of any state. Idaho rose 34,000 head and Minnesota grew by 25,000.
“The beef cow herd is the foundation of the total cattle inventory, and Iowa appears to be leading the national herd by about two years in the current cattle cycle,” according to Schulz.
Schulz says producers can use knowledge of the cattle cycle to improve profitability on their farms, if they do two basic things. First, buy low and sell high, and secondly, find out what other producers are doing, and do something different. Obviously, these are more easily said than done.
The livestock market outlook article and information files examine current and historical inventories, price projections, and planning information.
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