Happy New Year to everybody. 2014 is history and 2015 is officially here. The last year was interesting to say the least for crop and livestock producers. The drought, record high prices for protein (beef, pork, and poultry), significant declines in crop prices, record corn yields, and steep declines in fuel prices. The natural question then is what does 2015 have in store for agriculture? This list is in no particular order and accurately seeing into the future is tricky at best.
• Drought – While conditions have improved compared to the last few years and most of the state is at worst abnormally dry, producers as of today face an uncertain 2015 cropping season. Some models are predicting an El Nino building and an above normal precipitation pattern. Some aren’t sure. The region needs much above normal precipitation to help recharge soil moisture, diminish irrigation needs, and refill reservoirs.
• Water – Whether or not the drought disappears and the state moves back to normal, water issues won’t go away. The Ogallala Aquifer decline needs to be addressed for the long-term to sustain not just agriculture in Western Kansas but all those living and working west of I-135. This will take the efforts of everyone to solve this dilemma.
• Cattle – Even if everything returns to better than normal, it takes time to increase a cattle herd. High prices for everything from cow-calf to stockers and feeders aren’t going anywhere soon and are likely to last for the foreseeable future. And cattle coming out of the feedyard, in spite of record high prices, aren’t making producers much money.
• Commodity Prices – There are conflicting views on this but it appears prices will stay relatively low compared to their historic highs over the last few years. Unfortunately input prices don’t seem to want to follow. Improving efficiency will be vital for producers this year,
• Genetics – GMO crops will continue to demonstrate their value. The last several years have demonstrated the value of drought tolerant technology, pest resistance, and new herbicide technologies. More is coming soon for crops like winter wheat.
• Fuel prices – Experts are predicting the low for crude oil hasn’t been reached yet and expect this pattern to last well into 2015. While everyone is enjoying paying less at the pump and the “extra” money is helping the economy, experts are predicting long-term negative consequences if process continue to fall and stay low for too long.
• Property taxes – This isn’t a political column but the fiscal condition of the state and the tax policies enacted over the last several years in Topeka have caused a spike in property taxes in many rural counties. Add increasing mill levies with increasing land values and farmers’ and ranchers’ tax bills have increased significantly. Unfortunately, low crude oil prices, while great at the pump, will decrease tax revenues. Depending on how the current state budget crisis is dealt with, these rates could increase more for producers.