Use of feed, priced so high many expected to see substantial reductions in protein markets, actually fell only 2 % in the 2012-13 crop year, a new CoBank report finds.
That's because herd downsizing was held at a minimum, as meat prices rose, according to the Denver-based bank's "Subpar Economic Growth, Drought Relief, and Upbeat Crop Prospects" report in its latest Quarterly Rural Economic Review.
Key points of the report follow:
•Drought conditions improved in March, and grain and oilseed markets reacted with optimism.
•Impact of the 2012 drought continues to be felt in old crop grain and oilseed markets, however, with rationing the dominant theme for the latter half of the 2012-13 crop year.
•Pork and poultry industries avoided liquidations.
•New Zealand and Australia drought has hurt dairy production there, which may provide new opportunities for U.S. sales abroad.
•If the 2013-14 crops fail to reach potential and prices persist at current levels, the animal protein and dairy industries will need to scramble to realign operations.
Looking at the world market, CoBank says the world economy continues to rely on China and emerging markets as the main growth engines for new trade.
In the U.S., ag markets are vacillating between the reality of current low stocks and expectations of abundant future supplies due to record South American harvests, and the potential for U.S. bumper crops this fall, adds CoBank.
In corn, the market has been defined by two very different scenarios, according to the co-op bank.
Post-Drought Livestock, Range And Pasture Insight. No single group of producers has been more impacted by the 2012 drought than those who raise livestock. Download our FREE report, 5 Post-Drought Strategies For A Better 2013.