An Iowa State Extension economist provides insight on the 2018 crop and livestock markets.
Within the past four to five years, U.S. corn and soybean production reacheed record amounts. Iowa State Extension economist Chad Hart described recent production levels as phenomenal. However, he says market prices accompanying the phenomenal production are not near as great.
“Productivity wise, we’ve had an amazing run,” Hart said. “The problem is, the amazing run means large production, overwhelming demand and lowering prices.”
Hart says growers can expect similar grain prices in 2018.
“My nickname is Dr. Doom,” Hart said. “When we look at the crop side, it’s a continuation of what we saw in 2016 and 2017. Again – strong production, good demand, but low prices.”
Livestock in the United States welcomed growth in 2017. Hart says the livestock industry will continue to see tremendous growth as we move into 2018.
“This year we’ll produce about 100 billion pounds of meat in the U.S., (which is) about a three-percent growth,” Hart said. “What’s really driving that is international demand. We’re seeing a lot of places, especially south and east Asia increasing their meat consumption and pulling meat from the U.S. That’s helping bolster prices as we look at the livestock side.”
Hart adds the livestock market looks a little more promising heading into the new year.
“As I’m looking at the livestock side, it’s a case where demand is starting to run a little bit ahead of supply, so we’re seeing slightly better prices and returns,” Hart said.
Hart says looking at agriculture as a whole, the industry looks very similar to 2016 and 2017.