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  • Fewer Cattle on Feed But, Some Questions

    Fewer Cattle on Feed But, Some Questions

    USDA released its August Cattle on Feed report on Friday, August 22nd.  While the easy headline numbers were that 1.6 percent fewer cattle were on feed from 4 percent fewer marketings and 6.1 percent fewer placements, the level of placements leave a few questions.

    The decline in placements was not quite as large as the average pre-report estimate expected.  July’s 6.1 percent decline in placements compared to last July amounted to 104,000 head.  Feeder cattle imports from Mexico were about 128,000 head fewer than last July.  So, if the border had been open, not considering any other events, placements might have been larger than last year.   

    For the year through July, placements are 5.2 percent smaller than last year, or 643,000 head.  Through July, about 628,000 fewer feeder cattle have been imported from Mexico than in 2024.  Almost all the decline in placements this year can be attributed to the border closure.  It is a bit surprising that domestic placements are not lower, given the smaller calf crops.  There are a couple of assumptions in this worth remembering.  While imported Mexican feeder cattle do eventually go to feedyards, they may graze pastures and rangeland prior to placement, which might create some timing issues.  It’s likely that if the border had been open this year that imports would have lagged behind 2024’s fast pace.

    So, where are we finding all these domestic, U.S. produced feeders to place in feedlots?  One answer could be that high calf prices are encouraging producers to sell now, pulling feeder cattle placements ahead.  It may also be that some producers are continuing to sell heifers.  The decision between selling now at record prices or counting on future returns may still favor selling now for some producers.  

    One consideration is that selling and placing those feeders early may squeeze the supply of stocker cattle for winter grazing later this Fall.  Recent rains in some wheat pasture areas might suggest the opportunity for grazing, but there may be fewer available stockers.   

    Anderson, David, and Josh Maples. “Fewer Cattle on Feed But, Some Questions.” Southern Ag Today 5(35.2). August 26, 2025. Permalink

  • What Keeps You Up at Night? Understanding Stress and Risk in Production Agriculture

    What Keeps You Up at Night? Understanding Stress and Risk in Production Agriculture

    Do you ever think that you might be the only one who worries about their farm? It might be useful to recognize that other people have worries too and that they can be strikingly similar to your concerns. Over the past several months, we have been collecting data from farmers and ranchers in four states spread across the country to better understand the factors that cause stress and how they view risk in their operations. The data were gathered from one-on-one interviews where producers were asked to characterize their daily lives on the farm, goals for themselves and their business, and how they perceive the stressors and risks that they face. The key question asked of all the producers was, “What keeps you up at night?” The answers differed based on the commodity produced and the area where they lived, but there were several themes that arose, revealing common stressors:

    1. Uncertainties regarding farm succession and the farm/family balance – the future of the farmland and farm operation passing from one generation to the next, plus the health and well-being of the family.

      “Communication around succession planning, I think, is sometimes a rock wall.” 

      The long-term social and familial sustainability of the farm operation is a key stressor for producers. This stress includes anything from communication with family members on short-term management decisions to long-term strategy and succession planning. Talking to family about issues, small and large, can be stressful and is often avoided, risking further complications down the road.  Additional issues that were addressed by the participants in the interviews included concerns about life-altering injuries, how to take a break from the farm when you are a one-person operation, to name a few. 

      2. Concerns over the reputation of agriculture and their specific farm, both in the local community, the broader industry, and society at large.

      “What does [the future related to ag] look like and what’s my role in that?”

      Farmers care deeply about producing a quality commodity product and being valued members of the community. As urban centers grow in rural states, farmers express concerns about land affordability and the public’s lack of understanding about the role of agriculture in their community. Producers also expressed that it is stressful to see the way the industry is portrayed at times in the media. 

      3. Unpredictable events – this includes weather changes, extreme weather, natural disasters, crop failures, herd or flock problems, excessive market fluctuations, etc.

      “Drought. (laughs) Like that’s just the reality now.”

      For many producers, they view these unpredictable events outside of their control as central factors in daily and long-term stress. The view that weather is a primary source of risk and unpredictable stress didn’t appear to be mitigated by insurance products or government payments. Rather, it is a constant that farmers have little control over and often worry about.

      4. Difficult farm management choices – making the daily and long-term strategic decisions that impact the financial viability of their farming operation.

      “Every input’s up – diesel, seed, fertilizer – you name it.”

      Rising costs necessitate producers making new farm management choices, resulting in new stressors related to finances and viability. These include, but aren’t limited to, management choices related to labor, interest rates, maintaining production contracts, or losing or expanding landholdings. Many farms, no matter their size or stage of life, deal with tough management choices related to financial viability, sometimes many at one time.

      Of note is that these four key stressors are both daily and long-term. Recognizing that farmers and ranchers often have these stressors in common helps to put in perspective the everyday challenges of agriculture. For those supporting the farming industry through education and policy making, it prioritizes the need to help farmers understand and use risk mitigation products and programs to help manage stress on the farm. 

    1. Instacart, Hello Fresh, DoorDash, and CSA 

      Instacart, Hello Fresh, DoorDash, and CSA 

      At first glance, services like Instacart, Hello Fresh, and DoorDash may seem unrelated to Community-Supported Agriculture (CSA), a business model that connects consumers directly with local farmers through seasonal subscriptions and spotlights the shortest food miles, strong community ties, and sustainable farming.  However, the rapid growth of these convenience-oriented platforms (Kaczmarski, 2024; Restrepo & Zeballos, 2024; Statista, n.d.) is reshaping how people shop, cook, and eat. As more consumers prioritize convenience and time savings, traditional CSA models are under pressure to adapt or risk becoming obsolete.

      When it comes to delivery meals, services like Instacart, Hello Fresh, and DoorDash cater to different food preferences, such as grocery delivery, meal kits, and cooked meals, each offering increasing levels of convenience. Instacart provides the convenience of traditional grocery shopping without leaving home. For those who prefer not to shop for groceries themselves, Hello Fresh simplifies meal preparation with curated kits designed for busy individuals or those less familiar with cooking. Finally, for people who neither want to cook nor shop, DoorDash delivers ready-to-eat restaurant meals within minutes. The popularity of these services reflects a broader shift in food purchasing habits where time savings often take priority over the cooking experience itself.

      By contrast, traditional CSAs occupy the opposite end of the spectrum. Customers typically pick up raw ingredients and prepare meals themselves, valuing the experience of supporting their local community and using ingredients with the shortest possible food miles. While many modern CSAs have adapted by offering home delivery and more flexible subscription options, these services often still require advance commitment and less customization than convenience-focused platforms. Consequently, the rising popularity of services like Instacart, Hello Fresh, and DoorDash suggests shifting consumer preferences that pose challenges to the traditional CSA model.

      However, the increasing popularity of these services does not mean that demand for local food is shrinking; in fact, it is actually increasing (USDA, 2024). Despite these challenges, CSAs still hold unique advantages that big supermarkets and large food delivery services simply cannot replace: unparalleled freshness due to extremely short food miles and the value of community support with community engagement. Then, what obstacles keep micro-local farmers from sustaining these unique values, and how might they be addressed?

      Many small local farmers say their biggest challenge is marketing their produce, yet they often show little interest in joining cooperatives that could help address this issue. This hesitation often comes from concerns about losing independence, mistrust, or simply a lack of awareness about the benefits. While running an independent business may seem more appealing, joining a cooperative does not mean giving up ownership, as cooperatives operate like owners’ clubs. By joining cooperatives, micro-farmers can focus on growing food instead of handling marketing, distribution, and sales alone. Along with gaining stronger bargaining power, cooperatives also help farmers save money by sharing resources, reaching larger markets, learning from each other, and building stronger brands. Working together can make it easier for farmers to stay profitable and succeed in today’s ever-changing food market.

      Policy and community support also play a crucial role in creating an environment where cooperatives can thrive and better serve local farmers. Many local organizations, including cooperative extensions, NGOs, and government programs, focus on providing training and technical assistance to new local farmers. While these efforts are valuable, concentrating solely on education without also developing reliable and easily accessible markets limits their effectiveness. To be more effective, policies and community initiatives should prioritize strengthening local cooperatives and developing both offline and online markets with low or no entry barriers for newcomers (Seo, 2024), using cooperatives as a central hub.

      Lastly, instead of seeing convenience services only as competitors, farmers might find opportunities to collaborate or integrate with them. For example, CSAs might use delivery platforms to expand their reach while maintaining their core values. Exploring these kinds of innovations could help traditional CSAs adapt to changing consumer preferences without losing their unique strengths.

      References

      Kaczmarski, M. (2024, April). Which company is winning the restaurant food delivery war? Bloomberg Second Measure. https://secondmeasure.com/datapoints/food-delivery-services-grubhub-uber-eats-doordash-postmates/

      Restrepo, B. J., & Zeballos, E. (2024, February). New survey data show online grocery shopping prevalence and frequency in the United States. USDA ERS. https://www.ers.usda.gov/amber-waves/2024/february/new-survey-data-show-online-grocery-shopping-prevalence-and-frequency-in-the-united-states

      Seo, F. (2024, July). Is the current CSA model sustainable? A lesson from Korea. Southern Ag Today. https://southernagtoday.org/2024/07/05/is-the-current-csa-model-sustainable-a-lesson-from-korea/

      Statista. (n.d.). Meal kit delivery – United States. Statista Market Insights. Retrieved August 1, 2025, https://www.statista.com/outlook/emo/online-food-delivery/grocery-delivery/meal-kit-delivery/united-states

      U.S. Department of Agriculture, Economic Research Service. (2024, March). Agricultural Census shows strong growth in direct sales from farms and ranches. Charts of Note. https://www.ers.usda.gov/data-products/charts-of-note/chart-detail?chartId=108821

      Seo, Frank. “Instacart, Hello Fresh, DoorDash, and CSA.” Southern Ag Today 5(34.5). August 22, 2025. Permalink

    2. How is the Consumer Price Index Impacted by Trade Talks

      How is the Consumer Price Index Impacted by Trade Talks

      Since “Liberation Day” back on April 1, 2025, and even before that, trade has been a major news topic.  The current administration’s strategy to use tariffs and the size of the U.S. economy as leverage to change trade relationships with the rest of the world has generated a lot of uncertainty in the market.  Both ag and non-ag industries have reacted to the almost daily trade talk news. Arguments for and against tariffs are all over the place, with the main question being, who is going to pay for the tariff hikes? 

      To better address this question, it is important to differentiate between short- and long-term effects as the market adjusts to news regarding tariffs. Tariffs are a tax imposed on imported goods and services.  Sellers will do their best not to pass the tax to the consumers as that will probably reduce the quantity demanded and potentially reduce their market share to competitors less affected by tariffs.  Therefore, to keep their market share, sellers might absorb some of the impact of the tariffs in the short run waiting for the results of trade negotiations.  However, if sellers believe that the new tariff rates will remain in place for the long run, they might decide to pass the cost of the tariffs to consumers as their profit margins are probably reduced.

      To illustrate, Table 1 shows the monthly percent changes in CPI for all urban consumers, which shows that there has not been a major change in CPI after “Liberation Day.”  The latest figures for July 2025 show that the CPI for all items is 0.2 percent, while food remained unchanged and energy decreased 1.1 percent.  In addition, the un-adjusted 12-month CPI ending in July 2025 shows 2.7 percent for all items, which is within normal ranges, especially coming off a historic high inflation over the last couple of years.  Food items went up 2.9 percent, with the largest increase being in food away from home at 3.9 percent, while energy went down by 1.6 percent. Will this continue over the intermediate- and long-run? Only time will tell.

      Table 1. Percent Changes in CPI for All Urban Consumers (CPI-U): U.S. city average

       Seasonally adjusted changes from the preceding month
      Jan. 2025Feb. 2025Mar. 2025Apr. 2025May2025Jun. 2025Jul. 2025Un-Adjusted 12-month*
      All Items0.50.2-0.10.20.10.30.22.7
      Food0.40.20.4-0.10.30.30.02.9
      Food at home0.50.00.5-0.40.30.3-0.12.2
      Food away from home0.20.40.40.40.30.40.33.9
      Energy1.10.2-2.40.7-1.00.9-1.1-1.6
      Energy commodities1.9-0.9-6.1-0.2-2.41.0-1.9-9.0
      Gasoline (all types)1.8-1.0-6.3-0.1-2.61.0-2.2-9.5
      Fuel oil6.20.8-4.2-1.30.91.31.8-2.9
      Energy Services0.31.41.61.50.40.9-0.37.2
      Electricity0.01.00.90.80.91.0-0.15.5
      Utility (piped) gas service1.82.53.63.7-1.00.5-0.913.8
      All Items Less Food and Energy0.40.20.10.20.10.20.33.1
      Commodities Less Food and Energy0.30.2-0.10.10.00.20.21.2
      New vehicles0.0-0.10.10.0-0.3-0.30.00.4
      Used cars and trucks2.20.9-0.7-0.5-0.5-0.70.54.8
      Apparel-1.40.60.4-0.2-0.40.40.1-0.2
      Medical care commodities1.20.1-1.10.40.60.10.10.1
      Services less energy services0.50.30.10.30.20.30.43.6
      Shelter0.40.30.20.30.30.20.23.7
      Transportation services1.8-0.8-1.40.1-0.20.20.83.5
      Medical care services0.00.30.50.50.20.60.84.3
      *Ended July 2025
      Source: Consumer Price Index Summary, U.S. Bureau of Labor Statistics (BLS)

      References

      Bureau of Labor Statistics. “Consumer Price Index Summary.” Economic News Release. Published August 2025.

      Ribera, Luis, and Landyn Young. “How is the Consumer Price Index Impacted by Trade Talks.” Southern Ag Today 5(34.4). August 21, 2025. Permalink

    3. Next Year’s Cotton Market Possibilities

      Next Year’s Cotton Market Possibilities

      Longer run price outcomes for the 2026 crop will be influenced by expectations of supply and demand.  A major supply-related question is how much 2026 acreage will be planted to cotton.  The price of competing crops, relative to cotton prices, is an important consideration to the level of planted cotton acreage. Figure 1 shows a fairly strong relationship between the level of U.S. upland and pima cotton planted (as measured on June 30) and the ratio of December CBOT corn futures and ICE cotton futures during the first quarter of the year.  The higher the ratio, the less cotton is planted. 

      Of course, there are other important competing crops as well, e.g., sorghum, soybeans, and peanuts.  There are non-price influences, including how dry it is in Texas, the insurance base price, fixed cost influences, and the psychological influence of the preceding growing season.  But the price ratio of corn to cotton appears to capture a lot of these other influences in explaining variations in cotton plantings.

      What does Figure 1 imply for 2026?  As of early August, the Dec’26 CBOT corn/Dec’26 ICE cotton price ratio is roughly 6.5 (i.e., $4.50 corn divided by 69-cent cotton).   Assuming this ratio prevails during Q1 of 2026, it is historically associated with between 10.0 and 10.5 million acres of all cotton.

      Assuming 10.0 million acres of all cotton in 2026, and further assuming ten-year Olympic averages of U.S. all cotton abandonment (21%) and yield (869 lbs) per harvested acre, the result is a healthy crop of 14.3 million bales. This combines with NASS’s August 12, 2025 projection of 3.6 million bales of carry-in for a 17.9 million bale supply. Further assuming 14.2 million bales of total use, the result is under four million bales of ending stocks of U.S. cotton in 2026/27.  That outcome is neutral for prices as it represents static year-over-year ending stocks. 

      Caveats.  Obviously, the analysis above depends on price ratios which may change between now and early 2026.  Furthermore, the price ratio approach to forecasting planted acreage will be replaced by grower survey results, beginning at the Beltwide Conference (January 7) and continuing with the National Cotton Council’s survey release (February 9) and United States Department of Agriculture’s Prospective Plantings report (March 31) and Acreage report (June 30).

      The National Oceanic and Atmospheric Administration’s Climate Prediction Center forecasts equal chances for continuing ENSO-neutral conditions or the development of La Niña conditions during the winter.  The latter would imply more dryness and higher abandonment during 2026. 

      Data Sources: 
      Historical June 30 planted all cotton acreage data from https://www.nass.usda.gov/Quick_Stats/
      CBOT Dec corn and ICE Dec cotton futures settlements compiled from www.barchart.com

      Robinson, John. “Next Year’s Cotton Market Possibilities.” Southern Ag Today 5(34.3). August 20, 2025. Permalink