What is in this article?:
- Grain prices likely to drive US agriculture in 2013
- Grain crops promising
- Cotton, livestock
- Near record low stocks of grain will keep demand high and prices good for farmers through the 2013 season.
- The news is not universally good for farmers. Livestock and dairy farmers will continue to be in a high stress economic situation due to continually increasing grain prices, economists contend.
Regardless of the driver, soybean acreage across the region was up in 2012 and appears certain to be up again for the 2013 planting season.
Barr says the soybean market is riding on a smaller South American crop and on U.S. production concerns for the drought stricken 2012 crop.
Since 2006 world soybean stocks are down 12 percent. More alarmingly, exports from major soybean exporters like Argentina, Brazil, Paraguay and the U.S. are down an average of 35 percent.
Most economists agree this continued decline in soybean stocks worldwide should mean extended good prices.
Brazil and Argentina had a sharp increase (29 million metric tons) in soybean production in 2012 and U.S. production is expected to have a slight decrease.
Worldwide, soybean production is expected to increase by 11 percent for the 2012 production season, but demand will more than offset a one-year increase.
In the United States strong demand will absorb the smaller than expected crop, pushing stocks lower and domestic demand higher.
Whether the price of 2012 beans goes up or down will be driven by purchases made in South America and China, according to Barr. He says prices may be up or may be down, but almost assuredly will be high.
Declining soybean stocks will push soybean meal prices even higher, Barr says. Soy meal prices already are already up 45 percent over the past two years, he adds.
A larger than expected world cotton crop in 2012, plus reduced demand is pushing cotton stocks up worldwide.
A significant reduction in cotton acreage in the U.S. as a whole and in the Delta and Southeast in particular, has not significantly affected global cotton supplies.
Projections for acreage in 2013 vary dramatically from one source to another. Some cotton insiders say they expect similar drops across the cotton belt for the coming year.
While high grain prices have been a boon for some farmers, the corresponding high price for livestock feed has been devastating for many.
For example, beef cattle numbers are at their lowest level since 1952 and production is near historic lows (22.5 billion pounds).
The economic news is not all bad for livestock producers, at least for those able to stay in the business. Beef prices over the past two years have risen by 53 percent and hog prices are up by 65 percent.
Despite the high prices, production is expected to fall 45 percent and pork and poultry production by 1-2 percent in 2013.