Oct 08, 2015 at 08:39 AM CST
By Robert Pore
Nebraska farmers are in full swing harvesting another bountiful crop, but a new report says farm income will be challenged by a confluence of global economic factors through the rest of this year and into 2016.
Among those factors, according to the Quarterly Rural Economic Review from CoBank, are mounting supplies of grain and oilseeds, the U.S. dollar's continued strength and slowing growth in China. With inventories growing, crop prices should stay near their current levels well into 2016.
According to the U.S. Department of Agriculture's National Agricultural Statistics Service, corn conditions in Nebraska, as of the week ending Oct. 4, rated 2 percent very poor, 5 percent poor, 19 percent fair, 54 percent good and 20 percent excellent. Corn mature was at 82 percent, ahead of 75 percent last year but equal to the five-year average. Harvested was at 15 percent, ahead of 10 percent last year but near the 24 percent average.
Sorghum conditions rated 0 percent very poor, 1 percent poor, 25 percent fair, 57 percent good and 17 percent excellent. Sorghum mature was at 77 percent, ahead of 68 percent last year and the 71 percent average. Harvested was at 6 percent, near 5 percent last year but behind the 11 percent average.
Soybean conditions rated 1 percent very poor, 5 percent poor, 20 percent fair, 56 percent good and 18 percent excellent. Soybeans dropping leaves were at 89 percent, equal to both last year and the average. Harvested was at 31 percent, ahead of 15 percent last year but near the 35 percent average.
Winter wheat planted was at 84 percent, near 87 percent last year and the 80 percent average. Emerged was at 48 percent, behind 61 percent last year but near the 46 percent average.
Pasture and range conditions rated 3 percent very poor, 9 percent poor, 27 percent fair, 54 percent good and 7 percent excellent.
CoBank, an agricultural credit bank serving cooperatives, said that, although crop prices are weak, they will help ethanol producers and the animal protein and dairy sectors.
According to the report, animal protein — beef, pork and poultry — supplies are all on the rise after several years of challenges brought on by drought, higher feed grain prices and disease. The report said the animal protein complex is now growing per capita meat supplies at the fastest rate in nearly 40 years.
That's good news for Nebraska, which is among the nation's leaders in cattle slaughter and cattle and hog production.
The state is second in the nation in ethanol production at more than 2 billion gallons annually.
"In the face of mounting supplies and downward pressure on prices, U.S. agricultural exports now occupy center stage across the board — for grains and oilseeds, ethanol, animal protein and dairy," said Leonard Sahling, manager of CoBank's Knowledge Exchange Division.
A bright spot in U.S. agricultural exports is distiller's dried grains with solubles (DDGS). According to the U.S. Grain Council, they have grown from 1 million tons in 2006 to more than 11 million tons in more than 45 countries in 2014. China received the bulk of DDGS exports, consisting of 52 percent of the export market, while Mexico received 12 percent; Korea, 4 percent; Vietnam, 4 percent; and Japan, 4 percent.
DDGS, a by-product of dry-milled ethanol production, are used as a feed ingredient. Nebraska's 24 ethanol plants are among the more than 200 in the U.S. that produce more than 14 billion gallons of ethanol and 30 million tons of DDGS.
Mexico, Vietnam and Japan are three of the 12 countries involved in the Trans-Pacific Partnership negotiations, which were completed on Monday.
"Open, liberalized trade of goods and services is vital to the prosperity of the United States, including U.S. agriculture, and our trading partners around the world," said Tom Sleight, U.S. Grains Council president and chief executive officer.
In 2014, the United States exported more than $6 billion in corn and corn by-products to the TPP region out of a world total of $11.4 billion, Sleight said. He said a TPP agreement is expected to increase the output of all grain exports from the United States by 11 percent.