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  • Huge Cow Culling in Southeast? Not So Fast, My Friend!

    Huge Cow Culling in Southeast? Not So Fast, My Friend!

    Beef cow slaughter has been higher than year-ago levels for most weeks in 2021. National beef cow slaughter is up about 10 percent (or about 6,000 head weekly average) since July over the same period of 2020. In the southeast reporting region which includes AL, FL, GA, KY, MS, NC, SC & TN, beef cow slaughter has been about 25 percent higher since July 2021 than it was during the same period of 2020. That is equivalent to an additional 2,000 head each week on average. This region accounts for about 15 percent of national beef cow slaughter. There has been some additional cow processing capacity brought online in the southeast in 2021 which helps explain the weekly increase in slaughter. But where are the cows coming from? Are producers in the southeast culling cows deeper than previously expected? Weekly auction receipts shed some light on these questions.

    Combined weekly auction receipts for slaughter cattle (reported as both cows and bulls) from GA, KY, and MS are up 3 percent since July compared 2020. That 3 percent increase equals an additional 128 head weekly average. The data is messy, and I don’t have the data for the other 5 states in the region, but the receipts don’t suggest enough of an increase in the number of cows being culled in the southeast to support the big increase in beef cow slaughter in the region. It seems likely that a good portion of the increase in slaughter are cows coming from other regions. Backhauling cows is likely a contributor when calves or feeder cattle are trucked from the southeast to other regions and cull cows come back. The January Cattle Inventory report will tell a more complete story of the changes in cows in each state. 

    Maples, Josh. “Huge Cow Culling in Southeast? Not So Fast, My Friend!” Southern Ag Today 1(49.2). November 30, 2021. Permalink

  • Peanut Outlook

    Peanut Outlook

    Peanuts are a predominant Southern crop, with Georgia, Alabama, Florida, and Texas – the top four states in 2021 planted acreage – accounting for over four-fifths of the area planted nationwide. Peanut acreage declined by 5% to 1.58 million planted acres in the US in 2021. This year’s peanut production is projected at 3.15 million tons, which would be a 2.2% increase above 2020. This forecast increase in production comes despite the decreased acreage planted and is driven by a projected 7.7% increase in yield over 2020, to 4,105 pounds per acre.

    Figure 1: 2021 Planted Peanut Acreage; Data source: USDA-FSA

    The strong peanut demand from the 2020/2021 marketing year is expected to continue and meet production this current marketing year. However, peanut stocks are expected to remain plentiful, above 1 million tons, a slight increase from last year. Prices for the 2021/2022 marketing year are expected to increase to $430/ton. The long-term outlook, as forecast by the Food and Agricultural Policy Research Institute (FAPRI), expects prices to remain in a similar range moving forward. 

    Figure 2: Past and Projected Peanut Prices by Marketing Year; Data sources: USDA-NASS and FAPRI-MU U.S. Agricultural Market Outlook (2021)

    Sawadgo, Wendiam. “Peanut Outlook.” Southern Ag Today 1(49.1). November 29, 2021. Permalink

  • What does “Shop Small” mean for your Small Town?

    What does “Shop Small” mean for your Small Town?

    Next week is Thanksgiving, and then the holiday season begins. “You get what you get and don’t throw a fit” may be the national holiday motto this year. National shipping companies have been warning of slow holiday shipping since September. You may be shopping for what you can find in stores near you. Fortunately, local shops have lots to offer. Plus, when you shop locally, your community gains not just the sales tax from your purchase, but also jobs and income, property tax, and vibrancy. If you’re avoiding crowds, many small businesses have website and are still offering curbside pickup.

    The Small Business Administration (SBA) has co-sponsored Small Business Saturday (with American Express) since 2010. The SBA reported that last year, US consumers spent $19.8 billion at independent retailers and restaurants on Small Business Saturday. Still, a 2019 SBA study showed that 70% of U.S. consumers were unaware of the event. Now you know! 

    Among Small Business Saturday shoppers in the 2019 survey, 97% agreed that small businesses are essential to their communities. The Small Business & Entrepreneurship Council notes 98% of businesses have fewer than 20 employees (96% have fewer than 10).

    Dudensing, Rebekka. “What does “Shop Small” mean for your Small Town?” Southern Ag Today 1(47.5). November 19, 2021. Permalink

  • Enrolled Base Acres Share of the ARC-CO and PLC Program by Crop

    Enrolled Base Acres Share of the ARC-CO and PLC Program by Crop

    A total of 246,601,268 base acres were enrolled in the U.S. in 2021 across 23 covered commodities (Outlaw, Raulston, 2021). The enrolled base acres for the Farm Bill support programs, Agricultural Risk Coverage (ARC-CO) and Price Loss Coverage (PLC), total 244,109,500 for the 2021 program year. The remaining 2,496,768 base acres are enrolled in Agricultural Risk Coverage Individual Coverage (ARC-IC). Price Loss Coverage has the highest share of enrolled base acres at 56.7% followed by ARC-CO at 42.3% and ARC-IC at 1%. The Southern Region (Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, and Virginia) account for 50,459,856 acres, or 20.6%, of the U.S. total acreage enrolled in PLC, ARC-CO and ARC-IC programs. The share of base acres enrolled by program for the 2021 crop year is 56.7% PLC, 42.3% ARC-CO, and 1.0% ARC-IC.   

    The share of base acres enrolled in 2021 between ARC-CO and PLC is shown in Table 1. The crop with highest percentage of base acres enrolled in ARC-CO for the U.S. is soybeans at 87.2%. The next closest crop in terms of share is corn at 48.4%. The crops with the highest percentage enrolled in PLC is long grain rice at 99.8% followed by peanuts at 99.7%, seed cotton at 91.2%, and grain sorghum at 73.75%. 

    Table 1. Share of Enrolled Base Acres by Crop for the 2021 Program Year.

    2021 ARC-CO vs. PLC

     13 Southern States ARC-CO %U.S. ARC-CO %13 Southern States PLC %U.S. PLC %
    Corn50.4%48.4%49.6%51.6%
    Grain Sorghum24.1%26.4%75.9%73.8%
    Peanuts0.17%0.26%99.8%99.7%
    Rice (Long Grain)0.05%0.16%99.9%99.8%
    Seed Cotton09.2%08.8%90.8%91.2%
    Soybeans86.8%87.2%13.2%12.8%
    Wheat14.3%16.85%85.7%83.3%
    Source: USDA/FSA. Available at: https://www.fsa.usda.gov/programs-and-services/arcplc_program/arcplc-program-data/index

    The seven major program crops shown in Table 1 account for 98.7% of total base acres enrolled in the South according to Outlaw and Raulston. The three southern crops of long grain rice, peanuts, and seed cotton range from 90% to 99% enrolled in PLC and drive the U.S. total. Comparing the South to the U.S. for the other four crops shows the South trends with the U.S. in the share of ARC-CO and PLC enrolled base acres. The biggest differences are two percentage points higher in the South for corn ARC-CO, grain sorghum PLC, and wheat PLC. The 2018 Farm Bill allows farm operators to make program election changes in crop years 2021, 2022, and 2023 for ARC-CO and PLC. 

    Citations:

    Outlaw, Joe, and J. Marc Raulston. “Southern States Share of Major Crop Bases.” Southern Ag Today 1(45.4). November 4, 2021. Permalink

    Smith, Nathan, and Trey Bucklew. “Enrolled Base Acres Share of ARC-CO and PLC Program by Crop.” Southern Ag Today 1(47.4). November 18, 2021. Permalink

  • Inputs Up Sharply; Makes Planning More Important Than Ever

    Inputs Up Sharply; Makes Planning More Important Than Ever

    As harvest finishes up during the month of November, farms can assess how they fared for the year, and more importantly, make plans for next year. Compared to this time last year, farm inputs are up sharply; meaning planning for the 2022 crop year is more important than ever to be sure risks are managed.

    Taking a look at year over year changes in fertilizer and energy prices in the southeastern United States, one can see a dramatic increase. Data on average weekly prices for common fertilizers show an increase in the price of DAP by 75%, UAN by 91%, and Potash by 107%. Farm diesel is up 73% and LP is up 85%. Given the cold weather season hasn’t really started yet, energy prices are expected to stay up. Given demand for fertilizers is up while supply concerns exist, there is no indication that fertilizer prices will soften either. Other inputs like machinery and equipment, labor, and chemicals are also expected to be up.

    What does this mean for the farmer? Margins will be tighter next year. Farmers will need to know their cost of production to help manage their risks. Using enterprise budgets can help estimate cost of production. Fortunately, university Extension agricultural economists develop enterprise budgets each year as a guide for farmers to modify to reflect their specific production practices. After farmers calculate an estimate of their costs, they can determine the breakeven price and yield needed for their crop to cover those costs.

    Year over Year Prices for Energy Inputs in the Southeast, Nov. 6, 2020, to Nov. 5, 2021

    Chart Source: Author compiled with data from USDA Market News with State Departments of Agriculture from Alabama, North Carolina, and South Carolina

    USDA-AL Dept of Ag Market News, Montgomery, AL, www.ams.usda.gov/mnreports/MG_GR210.txt

    South Carolina Dept of Ag-USDA Market News, Columbia, SC, www.ams.usda.gov/mnreports/CO_GR210.txt 
    North Carolina Dept of Ag-USDA Market News Service, Raleigh, NC, www.ams.usda.gov/mnreports/ra_gr210.txt

    Smith, Amanda. “Inputs Up Sharply; Makes Planning More Important Than Ever.” Southern Ag Today 1(47.3). November 14, 2021. Permalink