The future will be a time of promise and peril for agricultural producers, a pair of nationally know ag market experts said Wednesday morning.
The two, Randy Blach of CattleFax and Mark Gold of Top Third Ag marketing, addressed over 200 farmers from around the state during the 2012 Grain and Cattle Outlook seminar. With the theme of managing risk, it was held at the Highland Hotel and Convention Center and sponsored by American State Bank.
Blach and Gold also stressed this is no longer the market place of our grandparents. Global crop production, changes in who uses the most oil and what nations drive the world economy play ever-growing roles in choices made on the farm.
“There’s a lot going on,” Blach said. “This is a totally different business than it was 10 years ago or five years ago.”
He asked those gathered if they had changed their view in light of this new market dynamic.
“The last three or four years have been a great time to be in agriculture,” Blach said. There will be a continued growth in world population and income, and 90 percent of that growth will be outside the United States.
With 700 million mouths to feed worldwide in the next decade, there is tremendous potential, he said. American farmers have the ability to help meet that need, in part through expanded technology.
“These markets work very, very, very well,” Blach said. “But, they have to be allowed to work” without government meddling.
From drought in South America to the debt crisis in Europe, the world is connected. “I want you to be plugged into these markets,” Blach said.
He also sees continued growth in beef exports. This year marks the first time ever the United States exported more beef than in imported, two more pounds American than they consumed.
And, global, exports will continue to slide. Farmers in the United States will see more access to Japan and might see some access to China.
In all, Americans are consuming 20 percent less beef, cattle and poultry than in the past. Market wise, pork is doing well, but poultry is remaining flat.
The dry conditions that plagued southern Kansas, Oklahoma, Texas and New Mexico this summer affected one third of the nation’s 30 million cow beef herd. But, weather conditions are predicted to improve.
“If you have the resources, don’t wait around too long” before acting, Blach said. With cow numbers at record lows in the U.S., it will take at least 18 months for there to be any significant increases.
“There is still plenty of risk,” Gold said. Farmers in the U.S. are sitting on their crops hoping for a better price. “But, the price won’t go up until the farmers sell. We need to get the grain out of the farmers’ hands” to free up the markets.
“These are world markets affected by world events,” Gold said. “I think there is more risk out there than the farmer wants.”
“This is a very timely topic right now,” said American State’s Steve Johnson. “These producers are getting ready to make decisions on what they are going to do with their crops and livestock.”
Jerry Renk of American State said it is important for a bank to not only be a lender, but also be a partner with the farmer, providing important information and tools to make sound choices. That, he said, is why ASB sponsored the seminar.