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‘Tis The Season for Lamb

Many meat items have holiday driven or seasonal peaks in demand.  For example, turkeys at Thanksgiving, chicken wings and the Super Bowl, hamburgers in grilling season, and lamb at Spring religious holidays. Christians, Jews, and Muslims have holidays where lamb may feature and we are now in the midst of those Spring holidays.

Live lamb prices hit record highs in 2021 and early 2022 due to relatively tight supplies and the continued strong demand due to people trying new food items during the pandemic.  As consumers returned to their normal habits following the pandemic and budgets tightened due to inflation, lamb demand contracted and prices collapsed.  More lamb supplies are also pressuring lamb prices lower this year.  Of course, imported lamb plays a large role in lamb supplies.

Average light weight 60-70 pound lambs in San Angelo, TX (the largest lamb auction market in the U.S.) averaged $230-$240 per cwt last week compared to $340-$350 per cwt last year.  These are light weight lambs heading to a meat packer.  Prices typically peak a couple of weeks before Easter and then decline as the holiday demand passes.  Currently, It looks like prices have already hit their seasonal peak.

Wholesale lamb prices have declined along with live lamb prices.  Lamb leg prices were $4.10 per pound last week compared to $5.87 at this time last year.  Wholesale rack of lamb is about $2.00 pound cheaper than last year at $11.52.  Lower retail prices have begun to show up in special features at grocery stores.

Over the last two decades, an important shift has occurred in lamb markets.  A “non-traditional” market has emerged driven by growing ethnic markets, direct sales to consumers, and some direct to restaurant trade.  Hair sheep breeds replacing wool breeds have aided some of this change.  Hair sheep breeds are allowing producers in the South to enter this market again.  Statistics on sheep numbers for most Southern states were discontinued back in the 1970s as fewer and fewer sheep were in the South.  It appears that growing non-traditional markets are providing some opportunities for farmers in the South.

Anderson, David. “‘Tis the Season for Lamb.” Southern Ag Today 3(14.2). April 2, 2023. Permalink

April 4, 2023
Key Takeaways and Reliability of the 2023 Prospective Plantings Report

On Friday, March 31^st, USDA released the Prospective Plantings report. These acreage estimates are based primarily on surveys conducted by the National Agricultural Statistics Service (NASS) during the first two weeks of March. Principal crop acres planted were projected nationally at nearly 312 million acres, up roughly six million acres compared to last year. Corn acres are estimated at 92.0 million, up 3.42 million from last year. Soybean planted acres are estimated at 87.5 million, up slightly from last year by 55 thousand acres. Cotton acres are projected to be down 18% from last year, at 11.3 million acres. Peanut acreage is projected at 1.55 million acres, up 7% from last year, and rice area is projected at 2.58 million acres, up 16% from last year. All wheat acreage is projected at 49.86 million, up 9% from last year. Projections from the Prospective Planting results are comparable to recent projections released at the February USDA Outlook Forum which had March projections calling for 1 million more acres of corn, no difference in soybean acres, and 500,000 fewer acres of cotton.

The market expected more corn acres in 2023 compared to last year. Corn plantings were held back in 2022 due to high fertilizer prices, which have been alleviated slightly, allowing for a rebound in acreage. Cotton was expected to struggle to retain acres this year due to struggling demand and lower prices compared to other commodities. Every state, besides Arizona, is projected to remain steady or see a decrease in cotton acreage from last year. Rice acres are seeing a rebound on higher prices, but a forecast of wet weather in the Midsouth over the next couple of weeks could lower plantings. Price reaction from the report was mixed, with harvest contract corn unchanged, soybeans 10-15 cents higher, cotton 0.40 cents lower, and rice unchanged.

How reliable are the March prospective planting numbers? The NASS planted acreage projections across the U.S. generally hold well with low predictive error and hold especially well for corn and soybeans (Figure 1). There appears to be a larger error, albeit still quite small, when predicting planted acreage for cotton and rice. This is likely for two reasons stemming from the fact that cotton and rice are grown primarily in southern states. The larger variance can be due to (1) the smaller sample size of farms and (2) the alternative crops available to plant in place of corn and soybeans. Most of the U.S. corn and soybean acreage is grown in the upper Midwest but tends to take up acreage across the entire U.S. which allows for a larger sample of farmers and less variance. In the south, farmers rotate corn and soybean crops with cotton, peanuts, and even some vegetables. This makes it more difficult to project acres that may shift based on rotational needs, commodity prices, input costs, and weather.

One way to investigate the difficulty in projecting acreage is by choosing the subsample of southern states to see if 1) there is more variance across the changes in corn and soybean acreages given a smaller sample and 2) the pattern of acreage changes across cotton and rice still holds in the subsample. We find this to be true (Figure 2). We see more differences each year between prospective and actual planted acreages in corn and soybeans across southern states, and the general pattern of differences each year for cotton and rice still holds between the full U.S. sample and the southern subsample. This implies that we should generally not expect any significant changes in harvest price expectations driven by differences in planted acreages but rather look to future market-moving events.

Figure 1. Comparison of Prospective vs. Actual Planted Acreage across the U.S. (2014-2023)

Source: USDA-NASS Prospective Plantings Report (2023)

Figure 2. Comparison of Prospective vs. Actual Planted Acreage across Southern^[1] States (2014-2023)

Source: USDA-NASS Prospective Plantings Report (2023)

^[1] States included are Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia.

Biram, Hunter, and William E. Maples. “Key Takeaways and Reliability of the 2023 Prospective Plantings Report.” Southern Ag Today 3(14.1). April 1, 2023. Permalink

April 3, 2023
What is an “Ag-Gag” Law?

There is understandable concern within the livestock production community and processing industry that footage of production practices may be used to build public opinion against the accepted practices of their trade. One known purpose of so-called “ag gag” laws is to prevent animal rights organizations from directing an individual to infiltrate an animal agriculture operation as an employee of that operation – usually a swine, poultry, or dairy farm – to secretly record activities, which may then be used to publicize perceived animal cruelty and the like. Such laws variously impose criminal or civil penalties on farm employees who clandestinely gather imagery and may also hold accountable a third party (i.e., an animal rights organization) directing such activity. Ag gag laws have generally been challenged in federal courts as violations of free speech.

Early iterations of ag gag laws focused squarely on agricultural protection – such as Alabama’s 2002 Farm Animal, Crop, and Research Facilities Protection Act – in an era of bioterrorism fears. More recent laws – such as those passed in Arkansas and North Carolina – do not specifically target agricultural protection. Though initially dismissed, the challenge to Arkansas’ statute was revived in 2022 by the 8th Circuit Court of Appeals and remains under review.

North Carolina’s “ag gag” law – The Property Protection Act (N.C.G.S. 99A-1)[1] – was recently tested before the U.S. Court of Appeals for the 4th Circuit, which limited the application of the statute but did not invalidate it. The NC Property Protection Act creates a right of action on behalf of employers against employees who, without permission, collect information by various means, including unattended recording devices, offering employers recoverable damages up to $5,000 per day, plus attorney’s fees. The Act also holds accountable those who intentionally direct, assist, compensate, or induce another person to trespass (i.e., animal rights organizations).

The 4th Circuit Court’s opinion, North Carolina v. PETA, illustrates how language in an ag gag statute can run afoul of U.S. constitutional protections on newsgathering and free speech, and declined to apply principles of common law trespass or an employee’s “duty of loyalty” to supersede free speech protections of employees and their newsgathering efforts. Because the NC law has not been tested, the Court limited the bar of its application only to the parties in the case (i.e., PETA and others), and declined to invalidate the law, adopting a wait and see approach to how it might be used in the future.

A more in-depth look at the Court’s opinion can be found in this article.

Branan, Robert Andrew. “What is an “Ag-Gag” Law?” Southern Ag Today 3(13.5). March 31, 2023. Permalink

Photo by CQF-Avocat: https://www.pexels.com/photo/scrabble-tiles-613508/

March 31, 2023
Congressional Representation from the South

As the process to develop the 2023 Farm Bill is underway, it is interesting to look at the make-up of the House and Senate from the South.  The South typically includes Alabama, Arkansas, Georgia, Florida, Kentucky, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, and Virginia.  Southern Ag Today also includes Maryland in our grouping of Southern states.

Currently, 161 (or 37 percent) of the members of the House of Representatives are from the South (Table 1).   In terms of agriculture committee make-up, 17 of the 54 members (31 percent) of the House Agriculture Committee are from the South.  Mr. David Scott, the ranking member of the committee is also from the South (Georgia). In the 118^th Congress, 29 of the 75 freshmen members (39 percent) are from the South.

In the Senate, obviously each state has two senators, so the South would have 28 of the 100.  Five of the 23 members of the Senate Committee on Agriculture, Nutrition and Forestry are from the South (Table 2), with Mr. John Boozman of Arkansas serving as ranking member.

While the South has a significant amount of representation in Congress – and especially on the agricultural committees – there is a considerable amount of work to do in educating new members who have never taken a vote on a farm bill.

Table 1.  States with Members on the House Agriculture Committee.

Table 2.  States with Senators on the Senate Committee on Agriculture, Nutrition, and Forestry.

Outlaw, Joe, and Bart L. Fischer. “Congressional Representation from the South.” Southern Ag Today 3(13.4). March 30, 2023. Permalink

March 30, 2023
Wheat Straw Nutrient Removal
Baling wheat straw following harvest is seen as a way of utilizing a bi-product, with the only cost being baling and removal from the field. The straw could then be sold as bedding for livestock, mulch, or other uses that provide value. However, the cost may be larger than you think.

The cost of fertilizer and increased focus on soil health makes it essential that we know what nutrients we are removing from the field when we take away the wheat straw. Research has shown that removing 6,000 pounds of wheat straw per acre removes valuable nutrients (6,000 pounds is the approximate amount of straw associated with an 80 bushel per acre wheat yield.) Removing this quantity of wheat straw removes 60 pounds of Nitrogen (N), 10 pounds of phosphorus (P2O5), and 135 pounds of Potash (K2O), per acre¹. This is in addition to the nutrients removed when the wheat grain is harvested. Putting a monetary value to the pounds of N, P, and K taken away by baling the straw shows that the straw does have significant value. A price of $.86 per pound of nitrogen, $0.70 per pound of phosphorus, and $0.61 per pound of potash² were used to reflect the approximate cost of the nutrients. The table below shows the value of the N, P, and K removed on a per acre basis when the wheat straw is removed. The value of the wheat straw needs to be greater than $125.47 per acre or $25.09 per 1200-pound round bale. Adding the cost of baling (1200 lbs. round bale) of $14.50³ per bale and moving³ the bales out of the field at $4.35 per bale. The total of these costs is $43.94 per bale or $219.72 per acre. It should be noted that this is just the value of N, P, and K. There are some micronutrients as well as the organic matter that wasn’t considered in this analysis that have value if left in the field.

There are caveats. The amount of straw could be different depending on numerous factors, including limited yield, variety of wheat, the efficiency of the baler, and soil type. The value of N, P, and K will vary depending on your location as well. Check local resources in your area to estimate the value/cost of the removal of wheat straw.

Information for the values included in this article can be found in the following resources.
Runge, Max. “Wheat Straw Nutrient Removal.” Southern Ag Today 3(13.3). March 28, 2023. Permalink
March 29, 2023