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Mixed outlook for ag economy as strong livestock, dairy offset crop market concerns
An economist with CoBank says the U.S. farm economy is a mixed bag.
“It’s not good, but it’s not dire,” Rob Fox recently told Brownfield.
Fox says crop production has been increasing but demand could be problematic moving forward.
“On the row crop side, we essentially have a situation where there is just too much grain and oilseeds being produced in the world at the moment,” he said. “That’s running into a little bit of a weak global economy, but also global populations are leveling off and they are aging in a hurry.”
He says export competition is also a factor.
“Especially if South American production continues to grow at the clip it has over the past 20 years.”
Fox says the livestock and dairy segments have been thriving.
“All the main industries – beef, dairy, pork and poultry – are all having really solid margins at the moment and they have for the past year or so. It’s a real split depending on what you are looking at.”
Fox says a recent quarterly report from CoBank indicates dairy profitability is generally healthy at the farm level, but processors are struggling with volatile pricing caused by a shortage of milk protein and excess butterfat.