Report 7-19-21

The Purdue University/CME Group Ag Economy Barometer marked a second month of sharp declines, with producers being less optimistic about both current conditions on their farming operations as well as their expectations for the future. James Minert, director of Purdue University’s Center for Commercial Agriculture said that “Farmers expect their input costs to rise much more rapidly in the year ahead than they have over the last decade, contributing to their concerns about their farm finances and financial future.” The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted June 21-25.

For several years, a couple of cattleman’s organizations have complained that the Product of the USA meat label had been misused by large meat packers. They allege that the packers routinely import meat from outside the U.S., process it here, then slap a Product of the USA label on it, which misleads consumers who think that they are supporting U.S. producers. Recently, the U.S. Department of Agriculture announced that it would conduct a “top to bottom review of the use of the label.” The National Cattleman’s Beef Association got in line with other cattleman’s organizations who all hailed the move as a step in the right direction. NCBA Jerry Bohn said that the ‘Product of the USA’ label is not subject to source verification, is not tied to any kind of food safety standard, and is applied by packers and retailers in a manner that does not deliver value back to the cattle producer. This label not only misleads consumers, it is yet another barrier to producers gaining leverage and distinguishing their product in the marketplace,”

Drought conditions in the Four Corners Region and much of the western U.S. is impacting both farmers and ranchers. But some ranchers contend that as drought conditions intensify, their operations will suffer long term consequences, while farmers, many of whom have crop insurance will lose some ground, but will recover much faster. As drought conditions worsen, the only alternative for cow-calf producers who don’t have forage to feed their cows is to begin to liquidate their herds. This liquidation is already underway in some parts of the western U.S. with cow slaughter up 4% from year ago levels.

The term beef producer takes in a lot of farmers and ranchers who have cattle in their operations. Commercial cow-calf producers maintain beef cow herds with the intent to sell calves after weaning either directly to operations that may background the calves over the winter or go directly to feed lots. Cow-calf operations that raise calves that are to be sold as replacement heifers or bulls to commercial cow-calf operations pay special attention to genetic traits that include the weaning weights of calves, calving ease and disposition of cows… Traits that make their calves more valuable to other producers. Whether ranchers maintain commercial or pure bred herds, culling cows means that carefully selected genetics that are have been built up over decades and impact the profitability of their operations are being eliminated. Extension beef cattle specialists suggest that ranchers develop contingency plans before having to make decisions about culling their herds.

William Shakespear wrote, “He is not worthy of honeycomb that shuns the hive because the bees have stings.”

Leave a Reply

Your email address will not be published. Required fields are marked *