Texas Field Reports: Low Grain Prices Bad for Farmers, Good for Livestock Producers

Texas A&M AgriLife Extension Service photo by Adam Russell

Plentiful grain supplies likely mean low crop prices for farmers but lower costs for livestock producers looking for feed options through winter, said a Texas A&M AgriLife Extension Service economist.

Dr. Mark Welch, AgriLife Extension grains marketing economist, College Station, said the expected drier weather pattern through winter could cause problems for cattle producers’ winter pastures and potential grazing. But abundant supplies of grains and subsequent low prices could mean lower feed costs for all livestock.

Corn prices should remain low and steady, he said, following heavy yields at harvest for U.S. and Texas producers.

“There was a whale of a corn crop this year,” he said. “Acreage was down, but with the varieties we have now and the techniques that farmers employ, those acres brought unprecedented yields.”

Sorghum, another important grain that creates feed, fuel and food for Texas and U.S. markets, also had a banner production year but is expected to garner low prices, he said. Corn and sorghum acres were lower in 2017 compared to the year before, but above-average yields contributed to high supply numbers and, therefore, lower price trends.

Those above-average yields for the two major grains would be good for livestock producers who will find lower feed prices on various nutritional sources that could supplement traditional forages, Welch said. But grain producers will likely continue to see stagnant prices.

“It’s been a doldrum for corn prices the last few years,” he said. “We’re seeing $3.40 to $3.60 per bushel, and going into 2018 I don’t see that trend changing much from a producer’s price outlook.”

Grain from other producing nations could depress prices further, or be a catalyst for a rise in domestic prices, Welch said.

Corn prices reacted positively for farmers in June and July with the news of fewer planted corn acres nationally and dry conditions in the western portions of the Corn Belt and wet conditions in eastern portions of the Corn Belt, Welch said. But concerns were abated and the price jump was short-lived.

The same could happen if South American grain crops face problematic weather or some other misfortune during their growing season, which is now underway, Welch said.

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“Our harvest gets us to February-March, but if there is anything that could derail the price trends it would happen in South America,” he said. “Any problems and we might see firming prices, but if they bring in above-average yields like we did you could see prices continuing at relatively depressed levels.”

Welch said oilseed production continues to expand as stressed producers view soybeans, sunflowers, canola, and sesame as potential alternatives to feed grain and wheat production.

Cattle producers should also see good prices on oil seeds as feed, including cottonseed and soybean meal.

Low feed prices could mean further expansion of already record production numbers in the livestock industry, Welch said. U.S. poultry and pork producers set production records last year and cattle markets are still good for ranchers.

“Feed prices could support expansion of the industry that is at an all-time record high for production,” he said. “The cost component of feed will only help profitability.”

AgriLife Extension district reporters compiled the following summaries:

CENTRAL: A frost occurred but temperatures were warmer than normal. Dry conditions were good for the pecan harvest. Small grains performed well after early November rainfall. However, warm temperatures and high winds were causing fields to dry, and moisture was needed.

Livestock were in decent condition but supplemental feeding and hay were necessary. Most counties reported good soil moisture. Overall rangeland and pasture conditions were good in most counties, and overall crop and livestock conditions were good in nearly all counties.

ROLLING PLAINS: Weather conditions were warm and dry. Cotton harvest continued with reports of 1 bale per acre or better in some areas. Wheat pastures planted early were doing well and cattle were being turned out. Rain was needed to help wheat development, and pasture conditions were declining. Cattle were on supplemental feed.

COASTAL BEND: Warm temperatures and dry conditions were reported. Second-crop rice was still being cut, and harvest was expected to continue until mid-December. Pecan harvest continued. Fertilizing continued where moisture was available, and some producers were finishing up the last hay cutting.

Winter pastures emerged following a few recent scattered showers, but some winter pastures were stressed due to low soil moisture. Surface water levels for livestock was also being affected due to lack of rainfall. Cattle remained in good shape and many producers sent calves to market with steady cattle prices on the upside.

EAST: Rain was needed in all counties of the district. Drought conditions worsened in Cherokee County. Pasture and rangeland conditions were mostly fair to good with Cherokee, Houston, Newton and Marion counties reporting poor conditions. Hard winds dried up much of the topsoil moisture.

Subsoil and topsoil conditions were mostly adequate. Cherokee County reported very short conditions, while Wood, Marion and Upshur counties reported short conditions. Some producers in Trinity County were initiating controlled burns. Fall gardens were doing well in Jasper County. Producers were feeding livestock hay and feed in Marion and Trinity counties.

Wood County livestock were doing fair to good with some supplementation. Marion County cows were holding their weight, and calves were growing. No cattle were sold during the holiday in Houston County. Wild pigs continued to be a problem in pastures and hay meadows in Cherokee, Trinity and Upshur counties.

SOUTH PLAINS: Weather was dry and unseasonably warm. Subsoil and topsoil moisture levels continued to dry due to lack of rain and windy, arid conditions. Cotton harvest was wrapping up for most producers, and yields looked good. Peanut harvest was completed. Other crops continued to be harvested. Pasture and rangeland were in fair to good condition. Winter wheat continued to mature but also needed rain. Cattle were in good condition.

PANHANDLE: Temperatures continued to be erratic, hot then cold then hot again. Soil moisture was short to adequate in most areas. Soil moisture declined with windy conditions and above-average temperatures. Moisture was needed throughout the district. Harvest was still underway.

Deaf Smith County producers were busy harvesting cotton fields. Quality issues were coming up with lint and boll maturity. The corn crop was finally in with good yields reported on most fields. Winter wheat plantings were ongoing, and early planted fields were starting to be grazed by stocker cattle. Supplemental feeding of cattle on rangeland continued.

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NORTH: Conditions were mild with temperatures in the 70s, with no rain and sunny days. Topsoil moisture ranged from short to adequate with many counties reporting extremely low levels. Winds reduced moisture levels in topsoil. Wheat farmers were almost through planting, and most fields had emerged. Planting was delayed because of dry weather.

Winter pastures planted on time were suffering from lack of rain, and moisture was needed on wheat and other small grains. Cotton harvest was complete with most fields averaging 2 bales per acre. Some cattle ranchers started feeding hay, and most were feeding some supplements.

Cattle were doing well. Fall-born calves looked good and good temperatures should help their growth. Spring-born weaned calves were doing well. There were no cattle sales due to the holiday. Pond levels were decreasing quite a bit.

FAR WEST: Temperature highs were in the high 90s with lows in the 50s. No precipitation was reported. Cotton harvest was slowly nearing completion as producers finished up fields that required more travel time to reach. Yields still looked fairly good. Pecan harvest began and yields looked good so far. Rangeland conditions were in good shape and winter wheat was starting to emerge, but fields really needed rain. Producers continued to feed wildlife and livestock.

WEST CENTRAL: Weather conditions continued to be warmer than normal and very dry. Soil moisture continued to decline. Stock tanks were low with many dry or reaching critical levels. All areas needed rain. Fire dangers increased and burn bans were in effect. Winter wheat was in fair to poor condition due to lack of moisture. Wheat planting continued in some areas.

Cotton harvest was in full swing with good yields reported in most locations. Most farmers should have all cotton stripped by the end of December. Rangeland and pasture conditions remained fair. All forages were slow growing due to dry conditions. Livestock remained in fair to good condition.

Many farmers and ranchers turned livestock on wheat fields for grazing. Supplemental feeding was increasing. Pecan harvest was still underway but expected to be complete soon.

SOUTHEAST: Livestock were in good condition. The final cutting of hay was complete, and pastures could use rain as they transition from warm-season to cool-season forages. Dry conditions were persisting. Cool-season forages planted prior to an earlier rain were still holding on. Later-planted fields were not developing growth. A cold front dropped temperatures at night.

Brazos County experienced some near-freezing temperatures. Cover crops appeared to be in good condition. Soil moisture levels throughout district ranged from adequate to very short with short being most common. Rangeland and pasture ratings varied from excellent to very poor with good ratings being most common.

SOUTHWEST: Weather conditions remained very dry with soil moisture levels depleting rapidly. Rangeland and pasture conditions continued to decrease due to lack of moisture. Livestock remained in fair condition.

SOUTH: Weather conditions continued to be dry and warm for most counties. Temperatures cooled at night. There was no significant rainfall reported. Moisture levels were short in most areas. Peanut harvest continued and yields were above average. Wheat was under irrigation. Pasture and rangeland conditions were fair to good, but were declining as summer perennial grasses began to go dormant. Body conditions scores on cattle remained good.

In Zavala County, dry conditions kept producers busy irrigating spinach, cabbage, onions and wheat. Spinach harvest was very active there. Cabbage harvest was light. Native rangeland and improved pastures continued to provide adequate forage for grazing in some areas, however some producers reported light supplemental feeding activities. Some areas reported steady supplemental feeding of livestock. Deer breeders were also providing feed for wildlife.

Pecan harvest was completed. Local livestock auctions were steady in volume. Prices for feeder cattle were steady while cull cows and bulls continued to decline. Pairs and bred cattle also showed a slight decline in prices. Fall vegetable crops in Starr County progressed well. In Hidalgo County, harvests of sugarcane, citrus and vegetables continued. Row crop field work continued as well.

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