Feb 16, 2017 - By Daniel Bendtsen, Staff WriterComing off a year with record beef production, University of Wyoming livestock marketing specialist Bridger Feuz said a continually increased supply of meat will continue to suppress beef prices in the United States.
The last two years saw record production, while beef consumption bottomed out at 54 pounds per capita in 2015. In 2016, beef consumption rebounded to 59 pounds per capita.
At Farm and Ranch Days on Wednesday, Feuz said Fremont County residents will be likely to break even this year if they purchase Livestock Risk Protection, an insurance plan provided by the Department of Agriculture.
Even as production continues to grow, Feuz said prices are also expected to rise slowly over the next two years, but a new approach on trade could make it harder to bring American beef to the rest of the world.
President Donald Trump's "nationalistic approach" might benefit the cattle industry in the short-term, but Feuz said free trade is ultimately needed to ensure good financial returns.
Scott Priebe, who runs the Wyoming Ag Marketing grain storehouse in Riverton, said Trump's approach on the North American Free Trade Agreement is especially concerning given the country's high reliance on Mexico for agricultural exports.
When NAFTA was implemented in 1993, U.S. ag exports totaled $8 billion. By 2016, the total had grown to $28 billion, including $17.7 billion to Mexico.
While a strong dollar is typically a sign of a robust U.S. economy, Feuz said the current strength also makes agricultural exports too expensive.
"For the cattle business, it's not necessarily the best thing for us to have a strong dollar," he said.
Priebe said the strength of the dollar is becoming especially impactful on grain exports as South America becomes a more reliable producer.
"If our grain gets expensive to the world, they have other options," he said.
Priebe said that barley prices -- which currently sit at $9.05 per hundredweight -- should bottom out sometime in the next two years and begin rising again.
"I'm not saying we're going back to $13 barley (though)," he said. With the drop-off in the ethanol market, corn prices have fallen to $3.15 per bushel from a high of $8.50 in 2012. 2016 was a record year for corn production, but Priebe said he expects prices to rise to $4.50 this year.
"The opportunity for ($8 corn) to happen again actually seems pretty likely," Priebe said, noting the crop has continued to trend upward both in price and production over the last 50 years.
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