2017 Montana Agricultural OutlookOutlook George Haynes Kate Binzen Fuller ... – Local...

2017MontanaAgriculturalOutlookGeorgeHaynes

KateBinzenFullerDepartmentofAgriculturalEconomic&Economics

MSUExtension

MajorDataSource:NationalAgriculturalStatisticsServiceMontanaFieldOffice(EricSommer,Director)

AChallengingYear

0

1

2

3

4

5

6

7

8

0

50

100

150

200

250

300

350

Jan -15

Feb -15

Mar -15

Apr -15

May -15

Jun -15

Jul -15

Aug -15

Sep -15

Oct -15

Nov -15

Dec -15

Jan -16

Feb -16

Mar -16

Apr -16

May -16

Jun -16

Jul -16

Aug -16

Sep -16

Oct -16

Nov -16

Whe

at P

rices

, $/b

ushe

l

Cal

f Pric

es, $

/hun

dred

wei

ght

Calves Wheat

2016/17Overview

• Cattle– Decliningcattleprices

• USbeefproductionincreasedby6%in2016– Anticipatedtoincreaseby4%in2017

• USbeefexports– expectedtodecreasein2017

• USbeefimports– expectedtodecreasein2017

2016/17OverviewCrops

– Declininggrainprices• Recordworldwidewheatproduction(andstocks)• Improving,butlowexports(strongdollar)

– Japan,Mexico,Philippines,Nigeria,S.Korea,Taiwan– Australiacompetitiononthehorizon(largestcropinhistory)

– Pulsecropproductioncontinuestoincrease– Beetproductionstrong,otherissues– Localfoods/farmer’smarkets

CashReceipts(1995– 2016f)

Drought Status – February 2017

CATTLE

U.S.CattleInventory

Montanaherdflatatapproximately2.5millionhead

80,000

85,000

90,000

95,000

100,000

105,000

ThousandsofHead

U.S.AverageCalfPrices(2016$)

0

50

100

150

200

250

300

1995 1998 2001 2004 2007 2010 2013 2016

DollarsperHundredPounds(2016$)

NationalCalfPrices1913‐2016

DemandWeakens(beefdemandindex)

Source:BLS,USDA‐ERS,Compiled&AnalyzedbyLMIC

‐6

‐4

‐2

0

2

4

6

8

10

BeefDem

andIndex

BeefExports

USDA,FAS

0

100

200

300

400

500

600

700

800

Mexico Canada Japan S.Korea

MillionsofPounds

2010 2011 2012 2013 2014 2015 2016

BeefImports

0

200

400

600

800

1,000

1,200

1,400

Australia NewZealand Canada Mexico

MillionsofPounds

2010 2011 2012 2013 2014 2015 2016

2017FuturesPrices($/hundredpounds,nobasisadjustments– 3/10/17)

Location March April August OctoberChicagoMercantileExchangeFeederCattle 127 127 127 126

LiveCattle 118 103 103

Basis – 3/13/17: $9.98/cwt

CROPS(GRAIN,HAY&PULSES)

MontanaMajorCropAcreage

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

TotalAcresPlantedx1,000

Wheat Hay Barley Pulses

MontanaGrainProduction

0

20,000

40,000

60,000

80,000

100,000

120,000

140,0001992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

ThousandsofBushels

WinterWheatSpringWheatBarley

GlobalWheatProductionShares

Source, WASDE-563, 2017

Country 2014/2015 shares 2015/2016 sharesmmt % mmt %

Australia 23.9 3.3 24.2 3.3Canada 29.4 4.0 27.6 3.8China 126.2 17.3 130.2 17.7EU‐27 156.9 21.5 160.0 21.8India 95.9 13.2 86.5 11.8FSU‐12 112.7 15.5 118.2 16.1U.S. 55.2 7.6 56.1 7.6

Other 128.1 17.6 132.5 18.0

Total 728.3 100.0 735.3 100.0

Australia 2016/17 projection: 35.0

WorldWheatExports(1990– 2016)

0

20

40

60

80

100

120

140

160

180

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Exports(Millionsofm

etrictonnes)

Argentina/Brazil EU‐28 UnitedStates Canada Australia Kazakhstan/Russia/Ukraine AllOthers

USDA,FAS

U.S.WheatImports

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

1,000metrictons

Source:USDA;almostallCanadianimports;imports– 16%ofexports

“Glut”– YoderBunker

MontanaGrainPrices(2015$)

0

2

4

6

8

10

12

1995 1998 2001 2004 2007 2010 2013 2016

$/Bushel

WinterWheat SpringWheat Barley

MontanaWheatPrices(2015/2016)

38% decline since 1/2015; 17% decline in 2016

0

1

2

3

4

5

6

7

8

Jan - 15 Jun - 15 Nov - 15 Apr - 16 Sep -16

$/bu

2017FuturesPrices($/bu,nobasisadjustment– 3/10/17)

Location May July Sept DecMinneapolisGrainExchangeHardRedSpringWheat 5.38 5.45 5.52 5.62

KansasCityBoardofTradeHardRedWinterWheat 4.55 4.67 4.82 5.02

ChicagoBoardofTradeCorn 3.64 3.72 3.79 3.98

Basis –$0.23/bu

MontanaHayProduction

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

ThousandsofTons

MontanaHayPrices($2016)

0

20

40

60

80

100

120

140

1601995

1998

2001

2004

2007

2010

2013

2016

DollarsperTon

MontanaPulseProduction

0

200

400

600

800

1000

12001998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

MillionsofPounds

Lentils Dry Edible Peas

MontanaPulsePrices($2016)

0

5

10

15

20

25

30

35

40

451996

1998

2000

2002

2004

2006

2012

2014

2016

$/HundredWeight(cwt)

Lentils DryEdiblePeas

Farmer’sMarkets/LocalFoods

• Farmer’sMarkets– 62+communitiesmarkets– Stillgrowing,butrateofgrowthratehasslowedinthepastthreeyears

• LocalFoods– Maturingsmallfarmagriculture– Majorissues– cropinsurance&farmprograms

DepartmentofAgriculture,Montana

MarketingChannels

0 100 200 300 400 500

Farmer'sMarkets

RegionalFoodHubs

SchoolDistricts(FarmtoSchool)

PercentChangefrom2007

TrendsinU.S.LocalandRegionalFoodSystems,USDA/ERS,1/2015(068)

LocalandOrganic,US

TrendsinU.S.LocalandRegionalFoodSystems,USDA/ERS,1/2015(068)

AgEconomy Barometer

Purdue/CMEGroupAgEconomyBarometer

0

20

40

60

80

100

120

140

160

180

Oct,2015 Jan,2016 Apr,2016 July,2016 Oct,2016 Jan,2017

AgEconomyBarometer(Index)

2017Forecast

• Livestock: Herdexpansioncontinues Lowerprices,movingbelowhistoricalaverages

• Grains/Pulses: Worldwheat“glut”continues Pricesbelowhistoricalaverages Continuedgrowthinpulsecropacreage

Questions?

GeorgeHaynes,Ph.D.haynes@montana.edu

KateBinzenFuller,Ph.D.kate.fuller@montana.edu