High Plains Farm Credit President and CEO, Kevin Swayne, wraps up 2022 with a few industry thoughts on agriculture related to inflation and interest rates, drought conditions, and crop prices – all things which may impact farmers and ranchers in our area.

According to Matt Makens at Makens Weather LLC., we are coming to the end of our current 20–30-year warm cycle and should begin a 20–30-year cool cycle in the next 5-years. Based on this timeline and knowing that La Niña and El Niño last a year or two, we are looking at an El Niño (better growing conditions) and then another La Niña (dryer conditions) before flipping to the cool cycle. With the weather always changing, be sure to check out our Agriculture Market page. It contains commodity prices, weather, and other resources that impact the ag sector. Be sure to bookmark this page in your browser so you can come back to it easily in the future.

At the end of last year, ranchers front-loaded their fall cattle sales as drought conditions devastated pasture conditions and reduced feed supplies. This means that grocers and restaurants will benefit from lower beef prices as those cattle reach market weight, but beef prices will rebound even stronger as the cattle population declines. Remember that risk management tools such as Livestock Risk Protection (LRP) Insurance can insure against a decline in livestock market prices. The analyst delivering this message came up to me following the presentation, to ask about a cattle loan for bred heifers, so I feel confident in his message because he is putting his money where his mouth is!

2022 prices were some of the strongest we have seen in history. However, prices have weakened recently because U.S. farmers are projected to plant even more acres than they did in 2022. Despite higher input costs and uncertain weather risks, there is intense competition amongst crops for these acres. Wheat will be strong due to the Russia/Ukraine war, drought impacts on 2022 wheat supplies and crop rotation toward wheat due to better margins. The “food vs. fuel debate” for soybeans and corn will intensify as both production and demand for biofuels increase. In the U.S., renewable diesel production plans will more than double capacity to two billion gallons, with most of the supply coming from soybean oil. It is highly likely there will be more soybean acres planted than corn acres in 2023, which will strengthen prices for both.

As we say goodbye to 2022, we do so with a sense of gratitude for letting High Plains Farm Credit continue to be your trusted partner. It has been our pleasure to serve you and our rural communities. As always, do not hesitate to contact us if we can be of assistance. Merry Christmas from all of us at High Plains Farm Credit. I hope you enjoy the holidays and always remember what is most important in life: your faith, family and friends.

Merry Christmas and Happy New Year,

Kevin