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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
