Although rising production costs have been front and center in agricultural news for for a couple of months, the USDA Economic Research Service released a two reports last week that may be of interest to consumers and ag producers. The first concerned the number of beef cows on farms and ranches. Economists found that the beef cow herd totaled 30.1 million head as of Jan. 1, down 2% from a year earlier and the lowest since 2015. Last year, many ranchers sent cows to slaughter rather than keeping them to reproduce, as dry weather reduced the amount of pasture for grazing in the western U.S. and Great Plains, even though ranchers would normally have begun to build up their herds when cow numbers dropped last year. However, reductions in beef processing at slaughter facilities kept many cattle producers on the sidelines because they they were concerned that calf prices might be discounted if there was a backlog in processing fat cattle. Speaking at a recent cattleman’s meeting, Randy Blach, president of CattleFax said, “Now, beef producers have gained back most of that leverage, and beef demand is the highest in 33 years.” So this year, consumers may continue to find increasing costs of beef in grocery stores and restaurants.
The second USDA report, the 2022 Farm Sector Income Forecast, predicts a farm economy that will be more robust than many farmers and ranchers expected. The report found that although net farm income, a broad measure of profits, is forecast to decrease by $5.4 billion from 2021’s $119 billion income. This decrease is in part, due to a $15.5 billion reduction in direct government payments, since disaster payments related to Covid-19 will mostly disappear. Overall, farm cash receipts are forecast to increase by $29.3 billion due to higher crop and livestock prices. The report forecast crop receipts to be up by $12 billion led by increased soybean, corn, cotton and wheat prices, while increases in receipts for milk, cattle, calves, and broilers will lead the charge for the livestock sector, although farm and ranch production expenses will likely increase by $20.1 billion, with feed and fertilizer having the the largest dollar increases.
Although discussions about climate change are often heated, the following is a point to ponder. Insurance payments to U.S. farmers for crops lost to droughts and flooding have risen more than threefold over the past 25 years, according to an analysis of federal data by the Environmental Working Group that was released recently. They found that insurance payments to farmers due to drought rose more than 400% between 1995 and 2020 to $1.65 billion, while payments due to excess moisture from floods, rose nearly 300% to $2.61 billion.
Vertical indoor farming utilizes large, glass sided buildings in the middle of urban areas to grow high value vegetables and greens that are costly to ship from distant farm fields. Walmart is the first large U.S. retailer to significantly invest in vertical farming. Leafy greens produced inside Plenty’s Compton Farm vertical grow houses will be sent to Walmart’s California stores beginning later this year.
English writer and humorist Jerome K Jerome wrote, “If you are foolish enough to be contented, don't show it, but grumble with the rest.”
