Farm leader sees 'bleak' outlook for dairy, livestock operations in 2016

It doesn’t look like a good year for most farmers, says the president of Wisconsin Farmers Union.
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With predictions of continued low commodity prices the outlook is “bleak at best,” said Darin Von Ruden of rural Westby.
Von Ruden and his wife JoAnn and their son Brett have about 120 cattle on their beef and organic dairy farm, including 50 milking cows. They also raise corn and barley, all as feed for the cattle. The Von Rudens own 230 acres and rent another 75 acres.
Most producers of conventional milk are losing money at current prices, Von Ruden said.
The Wisconsin all-milk average price for January was $16 per hundredweight, down from the average price of $17.77 for the entire year 2015 and from the average price of $24.56 — a record high — for the entire year 2014, said Robert Cropp, professor emeritus with University of Wisconsin-Extension and UW-Madison.
“The all-milk price may be in the range of $15.75 to $16 for the second quarter, $16.25 to $16.75 for the third quarter and $17 to $18 for the fourth quarter and averaging $16.75 to $17.25 for the year,” Cropp said, when asked for his predictions for the rest of the year.
“The primary reason for declining cheese, butter and milk prices is the decline in U.S. dairy exports,” Cropp said. “China, the largest importer of dairy products, cut imports starting the last half of 2014. Imports were 50 percent less in 2015. Russia, the second-largest importer of dairy products, put a ban on importing dairy products from the EU countries and the U.S. in retaliation for sanctions put on Russia for invading the Ukraine.”
With the two largest importers cutting back on dairy product imports, world dairy prices have fallen, Cropp said.
“There has been a buildup of surplus dairy stocks in the world market. It doesn’t appear that U.S. exports will improve much until toward the end of 2016, putting downward pressure on milk prices.”
Although producers of conventional milk are seeing low prices, area organic milk producers — such as Von Ruden — are seeing much higher prices of about $35 per hundredweight.
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Prices for organic milk have remained strong, Von Ruden said, because “consumers are still consuming more and more of it” and supplies remain tight.
As for other livestock, Von Ruden said, “The beginning of 2015 was pretty good for beef farmers. But in the last three or four months, beef prices have dropped substantially and the outlook isn’t good. They’re saying prices will probably stay where they’re at or maybe even drop a little bit. The guys that are grazing or grow their own feed, they’re probably going to do all right.”
Von Ruden said pork prices have dropped a little “but there are still profitable margins, from what I understand.”
With current low prices, farmers who grow corn and soybeans as a cash crop probably will lose money this year unless they can reduce their production costs, Von Ruden said. Some may try to buy less expensive seed varieties, cut back on fertilizer use or try to negotiate lower rents that they pay to land owners, he said.
“Some guys have even gone so far as to sell some of the equipment they bought back in 2012 or 2013 when (commodity) prices were high, and rent equipment or hire someone else to do the work for them,” Von Ruden said.
Total U.S. meat and poultry production is expected to reach a record high of 97 billion pounds in 2016, as production of beef, pork, broilers and turkeys all increase, according to projections made Feb. 25 at the U.S. Department of Agriculture’s annual Agricultural Outlook Forum.
Although prices for livestock, poultry and milk declined in 2015, lower feed costs — and in the case of beef and dairy, improved forage supplies — prompted expansion of flocks and herds, said Rob Johansson, USDA’s chief economist.
Because of increased production expected in 2016, Johansson said at the forum, prices for cattle, hogs, broilers and dairy products are expected to fall from last year’s levels.
Fed steer prices are projected to average $137 per hundredweight in 2016, down 7 percent from last year, Johansson said. Hog prices are expected to fall to $47 per hundredweight, down 6 percent from 2015. Broiler prices are expected to average 88 cents per pound, down 3 percent from 2015.

“The primary reason for declining cheese, butter and milk prices is the decline in U.S. dairy exports.” Robert Cropp, professor emeritus, UW-Extension and UW-Madison

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

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