Arkansas Agriculture - Edition 44

Agriculture News

Rob Anderson 2017-02-07 02:55:43

Crop Price Crystal Ball Several of the break-out sessions at January’s American Farm Bureau Convention in Phoenix focused on the future; specifically making predictions about what U.S. farmers and ranchers can expect from the year ahead. The general consensus was that, while a new administration and Congress in Washington D.C. could result in changes to everything from the tax code to regulations, crop prices will likely remain in a “below average” holding pattern. Session speaker Pat Westhoff, director of the Food and Agricultural Policy Research Institute at the University of Missouri, provided his outlook on the crop market for 2017. It wasn’t pretty. “Barring outside factors like weather and foreign market changes, prices will continue to be below average, and possibly lower than 2016, based on current trends,” said Westhoff, a former chief economist of the U.S. Senate Committee on Agriculture, Nutrition and Forestry. He points to production levels of four key crops as a major issue in the ongoing price funk: corn wheat, rice and soybeans. “World production of these four major crops increased 846 million tons between 2002 and 2016,” he explained. “Just over the last 14 years alone, we’ve increased global production of these major crops by 48 percent.” According to Westhoff, global average yields for these crops, as well as all other grains and oilseeds – 14 major crops total – has been increasing at 1.1 percent a year, which roughly matches global population growth. “The last eight years, we’ve had four straight years with global average yield for the four major crops above the trend of 1980 to present, following three straight years below the trend,” Westhoff said. “Every single time during this period, when global average yield has exceeded the trend, prices have fallen. Every time it has been below the trend, prices have increased.” Westhoff added that, should there be a return to normal yields around the world during 2017, prices could normalize. However, it doesn’t appear now this is likely to happen. He pointed out that slowing biofuel growth and questions about growth in the Chinese market are likely to hold grain and oilseed markets to current trends. Overall, Westhoff predicted that there will not be much change in the markets for any of the major crops. Matt King, Arkansas Farm Bureau Director of Market Information and Economics, concurs that global trade and demand will be the key for U.S. growers in 2017. “Simply put, global demand continues to drive commodity prices. Large amounts of corn are exported to Mexico, and China is the number one market for U.S. soybeans,” he said. “Keeping these trade flows open is very important to U.S. agriculture.” King offered his thoughts on two major crops in particular – rice and soybeans. Rice acres remain “a wild card for 2017,” he said. After stocks ballooned in 2010, long-grain rice harvested acres fell by more than 38 percent. A similar decline in 2017 would put total U.S. long-grain rice acres between 1.75 and 1.5 million acres. “The market continues to send signals for farmers to grow more soybeans,” he said. “According to the USDA, corn prices need to reach $3.85 for farmers to break even, and many need closer to $4 to make corn worth planting in 2017.” C&H Farm Update On Jan. 19, the Arkansas Department of Environmental Quality completed its review of the C&H Hog Farm Drilling Study Report. C&H is a concentrated animal feeding operation located in Mt. Judea, within the Buffalo National River watershed, and ADEQ had undertaken an evaluation of the integrity of the storage ponds of C&H. In a news release, ADEQ stated that a multidisciplinary, internal-review team at ADEQ – consisting of a professional engineer, professional geologist and other scientists – reviewed the study’s findings while considering additional information derived from questions posed by concerned citizens. It found no evidence of a release from the storage ponds. The ADEQ personnel reviewed work by Harbor Environmental and Safety, which had undertaken the drilling study in September last year. Meanwhile, on Jan. 17, just before the ADEQ announcement, the Beautiful Buffalo River Action Committee – a group commissioned by Gov. Asa Hutchinson to address water quality concerns throughout the Buffalo River watershed – held its first meeting and approved its charter. The committee, which does not have a regulatory role, includes the directors of the departments of Environmental Quality, Health, Parks and Tourism and Agriculture, as well as the Natural Resource Commission. The directors of the Game & Fish Commission and Geographic Information Office are ex-officio members. John Bailey, Arkansas Farm Bureau’s Director of Environmental and Regulatory Affairs, attended the first meeting. Afterward, he explained that ArFB would be making one request of the group – adding agriculture-specific language to its mission statement. The present statement reads: “To protect the Buffalo National River as a source of scenic beauty, high-quality water, unique aquatic species and habitat and exceptional recreational uses through the coordination of resources within the Buffalo River Watershed.” ArFB is requesting that the commission add “…while recognizing the need for preservation of agricultural productivity and the livelihood of farm families in the watershed.” This language mirrors that used by Gov. Hutchinson in his official announcement of the committee’s formation, in which he stated that the Buffalo River is “a national treasure and a significant agricultural, recreational and natural resource.”

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