In this file:
· Why cattle ranchers have one of the most positive outlooks
· Higher Cattle Prices in 2020
· Poll shows optimism on the rise in rural Nebraska
Why cattle ranchers have one of the most positive outlooks
Abbie Burnett, CAB
via The Fence Post - September 10, 2019
“Economic and political order has become disorder,” said AgResource President Dan Basse, in market analysis comments at the 2019 Feeding Quality Forum in Amarillo, Texas.
In a third of the world’s economies today, Germany included, banks charge you to keep money in savings “ — you pay them, they don’t pay you. How many times in 5,000 years… this is really rare,” he said.
The pressure is on to put money to work in those economies, even to the point of devaluing the money.
“In agriculture, everybody is dropping their currencies so they have a competitive edge in producing more supply,” Basse said. “This is what’s giving us a supply bear market in the grains.”
Disincentives to save brought world economic debt to record levels, and the U.S. at $23 trillion holds the largest share of the $243 trillion total.
“It’s really why interest rates cannot rise,” said Basse. “So, we are kind of locked into this environment of debt and low growth.”
Enter the Chinese economy. Growth there and in India will see median annual incomes of at least $20,000 rising to 150 million people.
“That’s why this trade war, if you will, or trade debate is so centered on China — because they have the money to spend over the next six to eight years,” he said.
In the next four to seven years, China will become the leading economy in the world and at some point after that, India will become second largest.
The longer this trade war goes on, the more worldwide structural production habits change, Basse said: “Someone is going to produce what we don’t, and sell to China.”
In the midst of these trade negotiations, China is dealing with a major blow to its agricultural industry. African swine fever is reducing the world’s largest hog herd, which he said will decline from more than 600 million to 340 million head by year’s end.
“(China) is of course stepping up their beef imports,” he said. “They are so hungry that they’re now turning to Africa to see if they can bring in some beef to fill their needs.”
Basse said if we had a Chinese free trade agreement today, “We couldn’t keep beef and pork on the shelf.”
But still, overall U.S. beef export commitments are good.
“There’s a solid demand for our beef, both in terms of the domestic market and the export market,” he said. “We think USDA is understating U.S. beef trade, so there’s a real argument of a demand bull market that’s developing as U.S. cattle prices tighten.”
The record-high domestic beef quality grades now are partly a result of U.S. consumer demand for better beef, and one reason premium-quality Angus branding has done well, Basse said.
“Everybody is looking for that higher quality cut,” he said. Record strong demand now and for “many years to come” suggests a clear advantage for producers of that higher quality.
“I think it’s a good investment,” Basse said. “Consumers will reward you with bigger demand going down the road.”
He doesn’t have the same optimism for grain farmers...
Higher Cattle Prices in 2020
Source: Idaho Farm Bureau Federation
via Russell Nemetz, Land & Livestock Report/AgInfo.net - September 11, 2019
Beef production in this country continues to grow and consumer demand for that beef also is on the rise.
Demand means higher prices for beef cattle producers, but also for shoppers at the nation’s supermarkets.
The US Department of Agriculture says cattle prices average at least 1-percent higher than last year and for the year 2020, could go up more than 2-percent.
July market prices, just released Friday, show a steady rise according to the USDA showing a classic supply and demand model for the beef market.
“The retail choice-composite beef price for July was estimated at $6.15 cents per pound. That price per pound is up from $6.00 per pound from a year ago. So retail beef prices are on the rise,” according to USDA Economist Seanicaa Herron.
According to the USDA, prices are up 2.5 percent from a year ago. But for this year, all cuts of beef, reveal a hike between 1/2 percent and 1.5 percent. Forecasters say for the coming year, beef prices could be up another 1-percent.
Idaho Farm Bureau Commodities Director Zak Miller says he’s kept an eye on the market and thinks prices had nowhere to go, but up.
“I think cattle prices are showing a short-term increase in the form of a correction from the Tyson fire a couple of weeks ago. It’s always encouraging to see upward ticks in the price movements but unfortunately, I expect to still see bearish and downward market moves,” said Miller.
Miller thinks producers and investors should look closely at long-term planning with the current markets, cautioning that beef-market volatility could still swing either way.
As Miller pointed out, the Tyson slaughterhouse fire on August 9th has impacted the beef market, driving up profit margins for processors while paradoxically slowing price hikes for cattle.
In Emmett at 7-Rivers Livestock, the modest spike in beef prices has not gone unnoticed. For the first time this summer, cattlemen are making a little money. Auctioneer Eric Drees says producers are encouraged.
“The market has found its footing. We hope we won’t see major slip backs. The fundamentals are there for the market to stay steady and get stronger. We're seeing packer manipulation right now, they’ve got total control of the market. The good news is that demand for beef is good and exports are good,” said Drees.
Drees says there are other bright spots on the horizon, President Donald Trump’s trade agreement with the European will drive up the value of beef. He says the economy remains steady and consumer demand is brisk.
Due in part to the fire that nearly destroyed the Tyson slaughterhouse in Holcomb, Kansas...
more, including audio [1:30 min.]
Poll shows optimism on the rise in rural Nebraska
Fifty-six percent of respondents to the 2019 Nebraska Rural Poll believe they are better off than they were five years ago, up from 52% last year.
BY Scott Schrage, University Communication
via KTIC (NE) - September 11, 2019
Lincoln, Nebraska, Sept. 11, 2019 — Rural Nebraskans are more optimistic about their current and future situation than they have been in the history of the Nebraska Rural Poll, according to 2019 results.
Despite some of the challenges faced by rural Nebraska this year, 56% of respondents to the Rural Poll — the largest annual poll of rural Nebraskans’ perceptions on quality of life and policy issues — believe they are better off than they were five years ago, up from 52% last year. This is the highest proportion across all 24 years of the study. Rural Nebraskans’ optimism about their current situation has been increasing the past six years, as the gap has widened between the proportions saying they are better off vs. worse off than they were five years ago.
This optimism was also reflected in their outlook on the future, with 52% believing they’ll be better off in 10 years. This was an increase from 49% last year. The gap between those believing they will be better off vs. worse off 10 years from now has gradually widened since 2013. The poll was conducted in the spring, right after Nebraska’s widespread and historic flooding.
“With the unprecedented disasters we have seen this year, the results are surprising but not necessarily out of the ordinary,” said Jason Weigle, associate extension educator with Nebraska Extension. “Collective recovery from disasters can create strong feelings of place and pride, as showcased by the ‘Nebraska Strong’ campaign. It remains to be seen whether this uptick in optimism continues as recovery progresses over the next five to 10 years and the agricultural economy continues to languish.”
Rural Nebraskans surveyed have higher levels of satisfaction with many financial items compared to last year. Satisfaction with job opportunities increased from 41% last year to 49% this year, job security increased from 68% to 75%, and satisfaction with financial security during retirement increased from 42% to 48%. Many of these percentages are the highest seen in the past 20 years.
Poll respondents also have positive views of their community. Most rural Nebraskans surveyed rate their community as friendly, trusting and supportive and have a positive attachment to it. Most also say it would be difficult to leave their community.
Despite the overall optimism across the state, Panhandle residents were less positive about both their community and well-being compared to residents from other regions, similar to last year’s findings. Four in 10 Panhandle residents surveyed think they will be better off 10 years from now, compared to 58% of residents in the northeast region. Moreover, 24% expect to be worse off 10 years from now. When assessing their current situation, only 38% think they are better off than they were five years ago, and 23% believe they are worse off. Their pessimism continues when asked about their community: 37% of Panhandle residents say their community has changed for the worse during the past year, and 29% think their community will be a worse place to live 10 years from now.
“Over the last three Rural Polls, the Panhandle has shown more pessimism than other regions of the state,” said Cheryl Burkhart-Kriesel, extension professor at the Panhandle Research and Extension Center in Scottsbluff...