Current prices for agricultural commodities are strong. The average auction market price in early May for 500–600-pound steer calves in Nebraska was $264 per cwt. Heifer prices were $30 lower, at $234 per cwt. Elevator prices for corn in western Nebraska are in the high $6-per-bushel range. Wheat prices at the elevator are around $8 per bushel. Hay prices are $200 to $300 per ton if you can find it. Severe drought and world market volatilities over the last couple of years have pushed all of these markets higher. Growers and sellers of these commodities are anxious for harvest to arrive. They hope these prices hold and yields are good so they can capture a decent profit margin for their work. Farmers and ranchers live with market volatility year in and year out. High prices bring both optimism and anxiety as producers know markets can turn around dramatically over short periods of time. They also know production losses sting a little more when they represent lost opportunities to market farm output into a high market. In this article, we examine market volatility for each of the above farm outputs. We take a historical look at variability in price outcomes, and add perspective on tools available to manage this risk at this point in the season.
{"title":"Managing Market Volatility in 2023","authors":"J. Parsons, J. Hewlett, J. Tranel","doi":"10.32873/unl.dc.cap008","DOIUrl":"https://doi.org/10.32873/unl.dc.cap008","url":null,"abstract":"Current prices for agricultural commodities are strong. The average auction market price in early May for 500–600-pound steer calves in Nebraska was $264 per cwt. Heifer prices were $30 lower, at $234 per cwt. Elevator prices for corn in western Nebraska are in the high $6-per-bushel range. Wheat prices at the elevator are around $8 per bushel. Hay prices are $200 to $300 per ton if you can find it. Severe drought and world market volatilities over the last couple of years have pushed all of these markets higher. Growers and sellers of these commodities are anxious for harvest to arrive. They hope these prices hold and yields are good so they can capture a decent profit margin for their work.\u0000\u0000Farmers and ranchers live with market volatility year in and year out. High prices bring both optimism and anxiety as producers know markets can turn around dramatically over short periods of time. They also know production losses sting a little more when they represent lost opportunities to market farm output into a high market. In this article, we examine market volatility for each of the above farm outputs. We take a historical look at variability in price outcomes, and add perspective on tools available to manage this risk at this point in the season.","PeriodicalId":118160,"journal":{"name":"Center for Agricultural Profitability","volume":"67 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-06-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127029817","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Center for Ag Profitability has released its Loan Payment Calculator, a web-based tool that makes it easy to calculate annual loan payments. Users must enter the total purchase amount, down payment amount, annual interest rate (APR), duration in years, and the starting year of the loan. The calculator tool allows users to download the payment schedule, also called amortization, as a PDF or CSV file.
{"title":"New Loan Payment Calculator Tool Launched","authors":"J. Groskopf","doi":"10.32873/unl.dc.cap007","DOIUrl":"https://doi.org/10.32873/unl.dc.cap007","url":null,"abstract":"The Center for Ag Profitability has released its Loan Payment Calculator, a web-based tool that makes it easy to calculate annual loan payments. Users must enter the total purchase amount, down payment amount, annual interest rate (APR), duration in years, and the starting year of the loan. The calculator tool allows users to download the payment schedule, also called amortization, as a PDF or CSV file.","PeriodicalId":118160,"journal":{"name":"Center for Agricultural Profitability","volume":"93 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-06-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124676942","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
One of the merits of enterprise budgeting is the value of statistics obtained by producers as they engage in decision-making activities. Some of the easiest and most useful computations that can be obtained from enterprise data are breakeven values. As the name suggests, a breakeven gives the price or yield required for the revenue obtained from the enterprise to equal the costs encumbered to produce that revenue.
{"title":"Using Breakeven Analysis for Better Decisions","authors":"Larry Van Tassell","doi":"10.32873/unl.dc.cap006","DOIUrl":"https://doi.org/10.32873/unl.dc.cap006","url":null,"abstract":"One of the merits of enterprise budgeting is the value of statistics obtained by producers as they engage in decision-making activities. Some of the easiest and most useful computations that can be obtained from enterprise data are breakeven values. As the name suggests, a breakeven gives the price or yield required for the revenue obtained from the enterprise to equal the costs encumbered to produce that revenue.","PeriodicalId":118160,"journal":{"name":"Center for Agricultural Profitability","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-06-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129943145","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In a unique initiative by the American Councils for International Education, Nebraska Extension educators Molly Brandt and Marilyn Schlake were invited to travel to the countries of Georgia and Armenia in 2022 to train local educators in the principles of the 4-H Entrepreneurship Investigation (ESI) curriculum. Brandt, an innovation and entrepreneurship 4-H educator, and Schlake, a Rural Prosperity Nebraska educator in the Department of Agricultural Economics, prepared for what they thought was a one-time experience. However, after their successful endeavor in Tbilisi, Georgia, in October 2022, they were invited back in April 2023, to deliver similar training in Yerevan, Armenia.
{"title":"Nebraska Extension educators bring entrepreneurship education to Georgia and Armenia","authors":"","doi":"10.32873/unl.dc.cap005","DOIUrl":"https://doi.org/10.32873/unl.dc.cap005","url":null,"abstract":"In a unique initiative by the American Councils for International Education, Nebraska Extension educators Molly Brandt and Marilyn Schlake were invited to travel to the countries of Georgia and Armenia in 2022 to train local educators in the principles of the 4-H Entrepreneurship Investigation (ESI) curriculum.\u0000\u0000Brandt, an innovation and entrepreneurship 4-H educator, and Schlake, a Rural Prosperity Nebraska educator in the Department of Agricultural Economics, prepared for what they thought was a one-time experience. However, after their successful endeavor in Tbilisi, Georgia, in October 2022, they were invited back in April 2023, to deliver similar training in Yerevan, Armenia.","PeriodicalId":118160,"journal":{"name":"Center for Agricultural Profitability","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-06-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115178744","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Diesel is one of the primary inputs in the transportation of goods throughout the United States. Livestock hauling is no exception. Feeder cattle are generally transported long distances in the fall as they move from summer grazing to placement in backgrounding operations or directly into feedlots. Cattle, and other livestock in general, can handle transportation stress fairly well – to a point. Trucking feeder cattle long distances can impact animal health outcomes, and improper animal handling can lead to bruised or injured cattle. These negative impacts can generally be offset by appropriate stocking densities, proper trailer ventilation, correct animal handling techniques during loading and unloading, and truck and trailer sanitation.
{"title":"The Changing Cost of Cattle Transportation","authors":"E. Dennis","doi":"10.32873/unl.dc.cap004","DOIUrl":"https://doi.org/10.32873/unl.dc.cap004","url":null,"abstract":"Diesel is one of the primary inputs in the transportation of goods throughout the United States. Livestock hauling is no exception. Feeder cattle are generally transported long distances in the fall as they move from summer grazing to placement in backgrounding operations or directly into feedlots. Cattle, and other livestock in general, can handle transportation stress fairly well – to a point. Trucking feeder cattle long distances can impact animal health outcomes, and improper animal handling can lead to bruised or injured cattle. These negative impacts can generally be offset by appropriate stocking densities, proper trailer ventilation, correct animal handling techniques during loading and unloading, and truck and trailer sanitation.","PeriodicalId":118160,"journal":{"name":"Center for Agricultural Profitability","volume":"78 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-06-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124310589","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
When profit margins are strong, livestock owners have a natural tendency to relax a bit and enjoy the business of producing animals. Expansion may come to mind and effort is often put forth to improve production output. Protecting market price may become a secondary priority. However, a lot can happen between now and marketing time. Price trends can suddenly turn and quite often expectations may not be met. Protecting price should be just as much — maybe more — of a priority when the price outlook is optimistic, as it is in a downward trend. An unprotected, overly optimistic price forecast can hurt your bottom line just as easily as a downward trend that suddenly gets worse.
{"title":"Managing Calf Market Risk with LRP in 2023","authors":"","doi":"10.32873/unl.dc.cap003","DOIUrl":"https://doi.org/10.32873/unl.dc.cap003","url":null,"abstract":"When profit margins are strong, livestock owners have a natural tendency to relax a bit and enjoy the business of producing animals. Expansion may come to mind and effort is often put forth to improve production output. Protecting market price may become a secondary priority. However, a lot can happen between now and marketing time. Price trends can suddenly turn and quite often expectations may not be met. Protecting price should be just as much — maybe more — of a priority when the price outlook is optimistic, as it is in a downward trend. An unprotected, overly optimistic price forecast can hurt your bottom line just as easily as a downward trend that suddenly gets worse.","PeriodicalId":118160,"journal":{"name":"Center for Agricultural Profitability","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-05-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130474118","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Feeder and fed cattle prices have continued to rise throughout the first part of the year. Reduced cattle supplies and relatively stable beef demand have helped support higher prices. Fed and feeder cattle prices have reached all-time heights, at least nominally. In low inflationary environments comparing nominal prices across time would be less problematic. Contrary to previous sentiments, inflation has not been transitory. Inflation, as measured by the Personal Consumption Expenditures Excluding Food and Energy (Chain-Type Price Index), has increased significantly in the last 3 years (see Figure 1) and thus comparison across years should be done using real prices – adjusting nominal prices by inflation. Real prices indicate that we have yet to surpass prices producers received for feeder and fed cattle in 2013-2015.
{"title":"Higher Cattle Prices Are Good but Wide Profit Margins Are Better","authors":"","doi":"10.32873/unl.dc.cap002","DOIUrl":"https://doi.org/10.32873/unl.dc.cap002","url":null,"abstract":"Feeder and fed cattle prices have continued to rise throughout the first part of the year. Reduced cattle supplies and relatively stable beef demand have helped support higher prices. Fed and feeder cattle prices have reached all-time heights, at least nominally. In low inflationary environments comparing nominal prices across time would be less problematic. Contrary to previous sentiments, inflation has not been transitory. Inflation, as measured by the Personal Consumption Expenditures Excluding Food and Energy (Chain-Type Price Index), has increased significantly in the last 3 years (see Figure 1) and thus comparison across years should be done using real prices – adjusting nominal prices by inflation. Real prices indicate that we have yet to surpass prices producers received for feeder and fed cattle in 2013-2015.","PeriodicalId":118160,"journal":{"name":"Center for Agricultural Profitability","volume":"152 3","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-05-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132442671","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This report shows how the currently proposed policies differ; shows how these policies have aligned with historical market behavior; provides alternative specifications to regional minimums; and suggests policy alternatives to regional minimums. The main purpose of this report is to show how current and potential alternative specifications of regional minimums would have historically aligned with observed market behavior. However, the fundamental question in the debate of the validity and effectiveness of regional minimums first rests on whether robust price discovery has historically occurred over time and within each USDA-AMS region. If there has been a lack of price discovery during certain times of the year or systematically within certain regions, then creating regional minimums is one alternative to increase negotiated trade to robust levels. Thus, if either of these two conditions are met, then one should not expect any formulation of regional minimums to match historical market behavior. This does not necessarily imply regional minimums are poorly constructed or would be ineffective at increasing price discovery. On the contrary, to create regional minimums so that they matched historical market behavior considering either of these two conditions would be counterproductive to the objective of increasing negotiated trade to a robust level. Rather than solving issues of price discovery, the enacted regional minimums would only continue permitting deficient levels of price discovery to persist under the guise of “improved price discovery.”
{"title":"Regional Minimums in the U.S. Beef Complex","authors":"E. Dennis, B. Lubben","doi":"10.32873/unl.dc.cap001","DOIUrl":"https://doi.org/10.32873/unl.dc.cap001","url":null,"abstract":"This report shows how the currently proposed policies differ; shows how these policies have aligned with historical market behavior; provides alternative specifications to regional minimums; and suggests policy alternatives to regional minimums.\u0000\u0000The main purpose of this report is to show how current and potential alternative specifications of regional minimums would have historically aligned with observed market behavior. However, the fundamental question in the debate of the validity and effectiveness of regional minimums first rests on whether robust price discovery has historically occurred over time and within each USDA-AMS region. If there has been a lack of price discovery during certain times of the year or systematically within certain regions, then creating regional minimums is one alternative to increase negotiated trade to robust levels. Thus, if either of these two conditions are met, then one should not expect any formulation of regional minimums to match historical market behavior. This does not necessarily imply regional minimums are poorly constructed or would be ineffective at increasing price discovery. On the contrary, to create regional minimums so that they matched historical market behavior considering either of these two conditions would be counterproductive to the objective of increasing negotiated trade to a robust level. Rather than solving issues of price discovery, the enacted regional minimums would only continue permitting deficient levels of price discovery to persist under the guise of “improved price discovery.”","PeriodicalId":118160,"journal":{"name":"Center for Agricultural Profitability","volume":"56 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115924282","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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