A-FAN Speakers Predict 'Layering' Will Emerge In Agriculture

More producers will raise livestock as value-added market for their grain.

Published on: Dec 9, 2013

The future of American agriculture may include a return to the days when most

row crop farmers also raised livestock, according to featured speakers at the annual stakeholders meeting of the Alliance for the Future of Agriculture in Nebraska in Lincoln.

Nebraska Department of Agriculture Director Greg Ibach, who spoke to the attendees, said that one of his department's areas of focus is to help build strong local communities by "layering, 1950s' style. Then, everybody had a few acres of row crops and also raised livestock, kept dairy cows, or finished pigs," he said.

The other areas of focus for his department include a vision for agriculture "that allows our sons and daughters to return to the family farm with promise of a successful career," he said. "That means we need to figure out how to let those farms grow, and how we let the industries in those communities grow to support those families coming back to the farm. This ties in with A-FAN's goal of building strong community economies through animal agriculture. This is where the "layering" comes in, he added. "The scale will

Chris Hurt
Chris Hurt

be different, but that will create opportunities in those communities."

The Keynote speaker was Chris Hurt, Extension agronomist and agricultural economist at Purdue University. He said the concept of "layering" may be in the cards for American farmers as a way to create added value to their operations. Feeding grain to livestock can bump the value of that bushel of corn in the future. The key is finding the balance between crops and animal sectors of agriculture, he said.

"We are interested in the balance between crops and animal sectors of agriculture," Hurt said. "Going back to about 2006, it turns out crop and animal receipts are pretty much in balance. There are times when we get a surge in grain prices and then in livestock prices. But in the long run things tend to balance out."

The 2012 drought reduced crop supply, "leading to increased prices in the feed market,

in turn causing increased consumer prices at the meat case," he said.

But Hurt sees a leveling off on the horizon. "After a period of a sharp up factor for the crop sector, we're going to go through a period of moderation.

He gave three reasons.

  • One of the big drivers is corn ethanol. "This has given the illusion that corn is in short supply. The 2006-2010 period was the time of the big boom for ethanol. But we should expect just modest growth going forward.
  • The rising income level in foreign countries, in China primarily. "Together, these two drivers (ethanol and Chinese soybean demand) create a big demand for corn and soybeans.
  • Under-investment in agricultural production in developing countries has been caused by the low prices of U.S.-produced corn during the 1998-2005 time period, he said. "Why would these countries want to raise crops when the U.S was raising them at such low costs?"

According to Hurt, the world is anxious to raise crops. "With rising income levels worldwide, demand will continue to grow and U.S. agriculture is not going to be able to keep up in a sustainable way. That growth will go to South America, where they can bring more land into production," he said.

Hurt said the best way to add value to your corn is to also raise livestock. This is where "layering" reenters the conversation. "Livestock has always been the historical value-adding system," he said.

Price trends shift over time based on supply and demand in the marketplace, according to Hurt, but over the long run they achieve a balance. Consumer prices for poultry and pork will lower in the next year or so, with beef prices lowering in 2016. The marketplace trends toward moderation, he said.