Ag Market Outlook: Uncertainty Rules

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“We just don’t know what to expect!” This is a quote from Wendy Becker, an MSU Extension agent on the Fort Peck reservation, and it sums up the ag outlook for the coming year well. It has been echoed in recent weeks by the ag news, including the recently released LMIC Review and Cattle Market Outlook. Aside from election season nervousness, weather concerns over the last several years that have involved floods, fire, and drought for Montana producers, we are seeing a mixture of market volatility and glut.

Several recent reports can help to make sense of it all…

USDA Acreage Report: This report updates the Prospective Plantings Report with actual plantings information and was released on June 30th without any big Montana surprises. The big news – revealed in the prospective plantings report–is that pulse acreage continues to grow in a big way — over 1 million acres in dry peas and lentils alone. This reflects good contracts over the last couple years, especially in comparison to wheat, which saw a decline in acreage in Montana and the US.

WASDE Report: Wheat stocks are huge, and projected larger even than in the last report. Season average prices predicted at between $3.40 to $4.20.

LMIC Report: We can expect volatility around low fed and feeder cattle prices—driven by supply increases. The July 1 Cattle Stocks Report won’t be released this year, due to fiscal constraints. For 700–800 and 500–600 pound steers, LMIC predicts a price decline of between 27–31% under last year.

Is there anything that looks good in all this craziness? There are glimmers of hope in pulse markets, and malt barley contracts. Yields for grains in parts of the state are being reported at double the average rates. Protein is scarce with these huge yields, which are also reflected in the Midwest, so premiums should be quite good for those that can get them. More on that from Anton Bekkerman’s piece on just that topic.

(Photo by Mike Olbinski Photography is licensed under CC BY 4.0)

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About Author

Kate Binzen Fuller is an assistant professor and extension specialist in the Department of Agricultural Economics and Economics at Montana State University. She holds an M.S. and Ph.D. from the University of California, Davis. Her extension and research program focuses on the economics of farm management decisions, including USDA programs and policies, pest and disease responses, and issues surrounding leasing and land values. Kate’s extension program takes her on the road often, resulting in a rapidly expanding knowledge and appreciation for Montana’s interstates, highways, and (especially) gravel roads.

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