January 12, 2006

Lower US crop and livestock prices expected in 2006

US farmers can expect a gloomy year ahead if predictions by economists at the American Farm Bureau Federation annual meeting turned out to be true. 

Revenue will likely be down for corn, soybeans and wheat while higher fertiliser and energy costs will drive expenses up, according to Informa vice-president Jim Sullivan

Corn prices will hover around the loan level in 2006 on reduced yields and fewer acres while an increase in soybean stocks from an increase in planted acres will lead to soybean prices below US$5 by November.

Wheat prices are also expected to take a beating because of a million-acre increase in soft winter wheat planting, improved yields and a continuing decline in U.S. wheat exports.

Cattle farmers can expect an equally bad year for beef and pork. Current cattle industry expansion is reflected in declining prices, said University of Missouri Agriculture Economist Scott Brown. He predicts a two-million head expansion this year, while beef demand will remain at last year's levels or even slightly lower.

While herd numbers for pork have remained relatively unchanged, sow productivity has increased substantially. Brown says export demand for pork should remain strong this year but domestic demand will slacken.