Hart: Hope for prices, livestock lies in exports

     Continued low crop prices, good signs for the livestock industry, and the importance of exports were the largest themes of an agriculture economic outlook seminar presented by Chad Hart, associate professor of economics and crop markets specialist for Iowa State University.

     The event was held Wednesday, Dec. 13 at the Youth Development Center in Monticello.

     Hart told the farmer-dominated audience of about 150 that the overall ag outlook, particularly for crops, may be brighter in the future than it is now.

     “I’m going to describe myself right now as a short-term bear, long-term bull,” Hart said. “I think next year, especially for crop agriculture, we’re going to struggle. But as I look at the livestock industry right now, I see more signs of hope in ’18, and that sign of hope from livestock is going to spread to crops in 2019.

     “The thing that’s driving it is the export lines.”

     If projections hold, Hart said, the five-year period from 2014 through 2018 will be “the five best demand years we’ve ever had” in the U.S.

     The problem, he said, is that those will also be the five best supply years the nation has had.

     “We’ve had incredible productivity,” Hart said. “In the case of corn and soybeans, the problem has been that demand has not been able to keep up.”

     The hope, Hart said, lies in exports.

     “Trade is an area we need to concentrate on,” he maintained. “If you’re involved in agriculture, you should be vehemently pro-trade. We produce more than we need. What do we do with the excess?”

     More than 20 percent of U.S. total agricultural production is exported, Hart said.

     “I’m going to argue domestic demand really can’t get any better,” he said. “We’re chewing through this domestically as quick as we possibly can. I’m watching growing feed demand from the livestock industry. I continue to watch the biofuel sector work through more and more crops.

     “The only place that can really pick it up a notch would be international demand.”

     The picture is brighter in the livestock industry, Hart said, largely due to exports. He showed slides indicating that the nation was up 14 percent in beef exports and up 8 percent in pork exports in 2017.

     “When I’m looking at livestock, we’re in pretty good shape right now,” Hart said.

     He added that the industry is responding to increased livestock production by increasing packing capacity, particularly on the pork side.

     “We’re going to expand our slaughter capacity by 10 percent over the next two or three years,” he said. “We’re doing that because we’re seeing the export growth. We know where we’re going with this pork.

     “And having that extra capacity is going to help prices continue to improve.”

     Overall, Hart concluded, “The future looks better. But we’ve got to go through a little more darkness before the dawn.”

     The event, which included a meal, was sponsored by Ohnward Bank & Trust.