I recently read an article titled “Economics of Animal Agriculture Production, Processing and Marketing” by Michael J. Boehlje. My marketing professor posted the article to blackboard for us to read. I found the article to be very interesting; it discussed a lot of important agriculture topics. I thought I would share with you all my thoughts on the main points of the article.
Along with higher energy costs comes an increase in costs of livestock production. Agriculture production is greatly affected by changes in energy prices due to energy consumed directly or by energy-based inputs such as fertilizer. High energy production costs will raise prices of agricultural products, reduce overall farm income, and lower agricultural output. Ethanol production is a huge factor in the livestock industry. The demand for corn for ethanol production has been the instigator behind the high feed costs. In my opinion, if ethanol production continues to increase, this creates a risk for animal agriculture as a whole. This affects the demand for higher values meat products, which then affects the overall profitability of animal agriculture.
I do not have a full understanding of how agri-food trade works, but from my knowledge, I think cross border flows are important for U.S. agriculture. Since the value of agricultural exports has risen, profits have also increased. Cross border trade has the potential to generate economic growth as well as reducing poverty among foreign households. In the long run, this product movement would increase U.S. production, productivity, and profitability in the agriculture industry.
The article focused a lot on comparing larger firms to smaller firms. Regulations cost smaller businesses more than larger businesses. I think this will eventually push several smaller businesses off the market, creating a monopoly. Those small businesses will not have the resources to stay in business. This leads me to question the agriculture growth potential and market conditions of the industry.
I believe the advantages of U.S. animal agriculture outweigh the disadvantages. The biggest strength that first comes to mind is our current market. Cattle are currently at record high prices; futures are not showing any sign of decreases anytime soon. Our beef exports have a strong performance with Japan and Mexico being our biggest buyers. We also have a high quality of meat, such as certified Angus beef, especially when selling on a carcass merit basis. Our pork exports are currently facing some challenges such as access restrictions in Russia as well as strong competition in the Japan market. Another weakness would be the fact that we import low grade beef. Finally, packer collusion is a factor in U.S. animal agriculture. Meat packers try to maintain dominance by controlling the meat market prices. This affects the market as a whole.
You can view this article online at http://www.choicesmagazine.org/2006-3/animal/2006-3-08.htm
We all know how powerful and temperamental Mother Nature can be at times. Just over ten days ago, South Dakota farmers and ranchers experienced an early season snowstorm that dumped four feet of snow in parts of the state. Along with the snow came rain, freezing temperatures, and seventy miles an hour winds. All of these factors contributed to a farmer’s worst nightmare.
During this time, cattle were still grazing in summer pastures where adequate shelter for winter like conditions was not available. A few inches of rain fell creating a muddy mess at first. After that came the wind, freezing temperatures and snow. Livestock died of suffocation, exposure, and many froze to death. Many of them huddled up in open pastures and ravines to try to stay warm. News stations are reporting that tens of thousands of cattle did not survive this disaster. Farmers woke up devastated to their cattle scattered across the land. Most ranchers lost 50-75 percent of their herd. Can you image that? Anyone involved in agriculture knows how much of a tremendous affect that has on a farmer and our economy. This disaster, including financial loss, will take many farmers years to recover from.
Image from thefencepost.com
The government shutdown that we are currently experiencing only makes things worse for these South Dakota farmers. Since the agriculture department is closed during this time, farmers are unable to report their loss. Also, the farm bill extension has been delayed due to the government shutdown which funded programs that provided disaster relief for farmers in similar situations.
Image from usatoday.com
What does this mean for our economy?
South Dakota is our nation’s 6th leading producer of cattle. They average around four million head of cattle per year, much of which are raised for slaughter. Beef prices could drastically increase due to the losses in South Dakota, depending on how fast we can get cattle to market again.
This disaster is devastating to cattle producers and anyone involved in the agriculture industry. Those who know how much time, money, and labor that are put into a farming operation know what affect a disaster like this can cause. Since winter hasn’t even begun, many farmers are wondering what our winter is going to be like.
You can stay up-to-date on this issue at brownfieldagnews.com
Hello everyone! I’m Angela Crase. I’m glad you stopped by to check out my blog. This is going to be a new experience for me; I will be blogging for the next few months as an assignment in my Public Relations class at Missouri State. (Who knows, I could like it and continue to blog.) I recently just moved to the big city of Springfield, Missouri to continue my college education. I am a junior at Missouri State University, majoring in Agriculture Business with an emphasis in Marketing and Sales. I am from a small town right on the Missouri/Arkansas line.
I am the youngest of three kids (two girls and one boy). My parents own several businesses and farms. My father strived to teach my siblings and I how to work hard. We didn’t have a lot of free time to go places or spend with friends. As I get older, the more thankful I am about the way I grew up. I learned good work ethics, responsibility, and respect. I grew up on a 1500 acre beef cattle farm. Most of the time we ran a large cow-calf operation. For a few years, we background around 600 Black Angus heifers. This is where my love of agriculture began. I enjoy anything outdoors, especially hunting and fishing. Farming can be a very rewarding experience. When you are a farmer, every day is different. Of course there are bad days and challenges but I think the biggest reward is being able to blend work and family all in one.
I have never been more excited to see what my future has in store for me. I hope to gain a lot of knowledge while I’m at Missouri State and be involved the most I can. I have a lot of knowledge in the livestock industry; I hope to expand my knowledge especially in the crop and grain industry because I have a great sense of interest in those areas.
Each day there is something new occurring in agriculture. My goal for my blog is to discuss a variety of important topics in the agriculture industry.