Complete beef trade data for 2015 was released recently in the USDA Economic Research Service’s Livestock and Meat International Trade Data series. Not surprisingly, imports of beef and veal into the U.S.
lose a lot of farms and ranches; roughly 20,000 to be specific. However, these losses were all hobby farms and easily made up by increases in the number of larger farms. Possibly more pressing however, is the loss of 1 million acres in farm and ranch land.
The Purdue Comparative Decision Support matrix, known as PCDS, includes a spreadsheet tool that allows users to create an operating budget based on their own fixed and variable costs, cash flow and expected revenue. The PCDS2 profit/loss analysis function uses cost and price information to calculate potential earnings.
The cash fed cattle trade was slow to develop last week, though it is unclear if that was because packers were holding out on the hope of declining prices or because they just didn’t need cattle last week. By last Thursday afternoon, not even 6,500 head had been confirmed for the whole week.
In 2016, payments to stakeholders are forecast to increase by $3.3 billion (4.8 percent), while net value added is forecast to rise by 1.3 percent. Net value added represents the sum of economic returns to all the providers of factors of production.
Agricultural exports support job growth in the U.S., and the number of jobs depends on the type of products exported. In calendar year 2014, $150 billion in U.S. agricultural exports supported an estimated 1,132,000 full-time civilian jobs, up from the 1,095,000 agricultural export-related jobs the previous year.
Both net cash and net farm income are forecast to decline for the third consecutive year after reaching recent highs in 2013 for net farm income and 2012 for net cash income. Net cash farm income is expected to fall by 2.5 percent in 2016, while net farm income is forecast to decline by 3 percent.
With the final 2015 trade data in hand, it is possible to look back and summarize 2015 North American cattle trade. Limited cattle inventories, market conditions and exchange rates all played a part in 2015 cattle trade between the U.S. and Canada and suggest what might be expected in 2016.
In the situation you describe, assuming the decedent held 100 percent of the property, the heir or heirs can sell with modest capital gain tax if the sale price is close to the appraised value of the property at date of death.
Canada and Mexico are the two largest sources of U.S. agricultural imports and account for about one-third of the total value, while the combined value of imports from the countries that comprise the European Union roughly equal the value of imports from Canada.
Cash receipts across all commodities are expected to fall by nearly $9.6 billion in 2016. As in 2015, this decline largely reflects falling commodity prices rather than changes in production, which are lower for a broad set of agricultural commodities in 2016 relative to recent years.
The outlook for ag credit conditions deteriorated sharply in late 2015, based on a fourth-quarter survey by the Kansas City Federal Reserve. Bankers expected a surge of farm loan demand and loan renewals and the steepest drop in repayment rates in the last decade, the survey found.
Animal/animal product cash receipts increased by 43.8 percent in real terms from 2005 to 2014, but are estimated to have declined by 12.5 percent in 2015 and are expected to fall an additional 4.3 percent in 2016 (to $181.4 billion) in nominal terms.
The agricultural industry is entering a period of margin compression, in which revenues are depressed and costs remain elevated, according to Brian Briggeman, Kansas State University (K-State) Associate Professor of Agricultural Economics and Director of the Arthur Capper Cooperative Center.
The new Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) programs, introduced in the 2014 farm bill, are expected to account for almost two-thirds of direct payments to farm operations. Payments under both of these programs are contingent on a producer’s prior enrollment of “base” acreage and prevailing conditions.
“This week will witness a classic standoff with cattle feeders attempting to regain some leverage from the packer, buoyed by futures and declining numbers in March and April,” projected Cassie Fish of The Beef Report.
Unlike the prior week, last week saw cash fed cattle trade get underway and done decently early. By Thursday afternoon, almost 75,000 head had been confirmed sold, with most of the trade occurring on Thursday. Prices paid for live cattle were down $2-8 at $128- 134.
According to the most recent World Agricultural Supply and Demand Estimate report, estimated beef production for 2015 was lowered by 10 million pounds (mp) to 23.76 billion pounds (bp). This number is likely to shift slightly for the next few months as 2015 data is completed and assessed, but large changes are not likely.
U.S. beef exports were below year-ago levels in December 2015 (most
recent data) and posted the first full-year value decline since 2009,
according to data released by USDA and compiled by the U.S. Meat Export