February 18, 2020

Saturday Update: Highlights on the U.S. Ag Economy

Donnelle Eller reported on the front page of the Business Section in Saturday’s Des Moines Register that, “Deere & Co., the maker of farm and construction equipment, said net income plummeted 43 percent in the first quarter with lower corn and soybean prices reducing demand for big green combines and tractors.

“The Moline, Ill.-based company warned its total farm equipment sales this year will tumble 23 percent, because of continued pressure from low commodity prices and falling farm incomes. The decline is expected to be sharper in the U.S. and Canada this year, falling 25 to 30 percent.”

The Register article added that, “In a conference call, Deere said large farm equipment sales would be hit hardest, pointing to an industry report that indicates U.S. and Canada demand for large tractors and combines will be half as much this year as 2013 levels.”

Also in Saturday’s Register, Christopher Doering reported that, “The amount of corn used to produce ethanol will drop slightly during the 2015-16 marketing year, as consumers drive less, the federal government said Friday.

“The Agriculture Department forecast corn used for ethanol production at 5.2 billion bushels during the marketing year that begins Sept. 1 — a decline of 25 million bushels from the current year. If realized, about 38 percent of the 13.6 billion-bushel corn crop expected to be harvested this fall would go to toward producing the renewable fuel.”

On Friday, USDA’s National Agricultural Statistics Service (NASS) released its monthly Cattle on Feed report, which stated in part that, “Cattle and calves on feed for slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 10.7 million head on February 1, 2015. The inventory was slightly above February 1, 2014.”

And with respect to U.S. milk production, NASS indicated in its monthly Milk Production report on Friday that, “Milk production in the 23 major States during January totaled 16.5 billion pounds, up 2.1 percent from January 2014.”

Meanwhile, AP writer Kourtney Liepelt reported on Saturday that, “The nation’s dairy goat herd climbed 2 percent in the past year to 365,000 animals, but producers said their annual sales are rising even faster — up by 15 percent or more. In Iowa, the number of goat farms has climbed from less than 20 a decade ago to about 200, behind only Wisconsin and California.

“Sheep and goat milk accrued $92.2 million in sales in 2012, according to the most recent figures available from the U.S. Agriculture Department’s census, with combined sales about a third higher than in the previous 2007 census…[M]uch of the new demand appears to be due to increased interest in artisan cheeses and populations that are more accustomed to goat milk, such as Hispanic and Jewish communities, Cornelius said. In much of the world, goat milk is more common than cow milk.”


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