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CATTLE MARKET                                                                          The Midwest Cattleman · September 15, 2022 · P10
      continued from page 3                 From an outsider’s view,  their entirety  in this type of  toric pieces of legislation grew
      duced by Iowa’s senior senator  it can certainly seem like all  setting – whereby supply deci- over nearly two years from
      in 2002 as the Transparency  this talk of consolidation and  sions, demand revelation, and  an idea conceived by a small
      for Independent Livestock  anticompetitive practices in  changing the product form are  group of from concerned pro-
      Producers  Act. It would re- the U.S. beef and cattle indus- in distinctly different indus- ducers to widespread support
      quire 25 percent of a packer's  tries suddenly sprung up. But  tries. Coordinating the system  from producers and consum-
      daily kill to come as a result of  USCA and other stakeholders  is difficult.”                          ers, grassroots organizations,
      purchases made on the daily,  have  worked  towards  restor-            “Difficult” is certainly un- Members of Congress, and the
      open market or spot market.        ing  leverage  and  true  price  derstated, but the point re- White House. Now it’s time to
         That was 20 years ago. Since  discovery in the cattle market- mains:  The U.S. cattle and  finish what Senator Grassley
      that time, we’ve seen a 75%  place for decades. Congressio- beef industries’ marketing  began twenty years ago: Set
      decrease in the number of  nal passage of the Cattle Price  process and dynamics are en- aside the interests of multi-
      cattle feedlots – from 55,472  Discovery  and Transparency  tirely unique. In our business,  national meatpackers and
      in 2002 to 13,379 in 2017 ac- Act and the Meat and Poultry  we need a referee to ensure a  secure the future of our sover-
      cording to U.S. Census of Ag- Special Investigator  Act rep- competitive playing field free  eign food system.
      riculture data. We’ve also lost  resents a significant step to- from interference.  We also                This editorial opinion is
      approximately 1,200 cow-calf  ward achieving that goal.               need a healthy and viable  that of Brett Crosby who cur-
      producers and backgrounders           In testimony to the U.S.  cash market to keep our in- rently serves as Region IV Di-
      each year.                         Senate Committee on  Agri- dependent producers in busi- rector for the U.S. Cattlemen’s
         “Rushing” into legislation?  culture, Nutrition,  and For- ness.                                     Association,        representing
      While we continue to hem and  estry, Dr. Stephen Koontz of              Not many have accused           Utah, Wyoming, and Colora-
      haw over whether or not bold  Colorado State University  Congress of moving too quick- do.
      Congressional action is need- observed that, “There are no  ly. Democracy is designed to
      ed, independent producers  other industries outside of  be a slow, laborious process.
      will exit the business.            cattle and beef…that work in  Momentum for these two his-

      USDA                               2002–21 average of $125.3 bil- would put total cash receipts  income is forecast to increase
      continued from page 3              lion. Net cash farm income en- in 2022 at their highest level  in 2022, but it is forecast to de-
                                         compasses cash receipts from  on record, even after adjusting  cline for farm businesses in all
      tion, net farm income in 2021  farming as well as farm-relat- prior years for inflation.                other regions when adjusted
      was at its highest level since  ed income (including govern-          Government Payments               for inflation.
      2013.                              ment payments) minus cash                                               Farm businesses special-
         Net farm income in 2022  expenses.                                   While  cash  receipts  over-    izing in dairy are expected to
      would be $0.9 billion (0.6%)          It does not include noncash     all are expected to increase in   see the largest growth in av-
      lower than in 2021 yet 42.1%  items — including changes in            2022, lower direct government     erage net cash farm income in
      above its 20-year average  inventories, economic depreci-             payments and higher produc-       2022, while those specializing
                                                                            tion expenses are expected to
      (2002–21) of $104.0 billion in  ation, and gross imputed rent-                                          in wheat, cotton, and specialty
      inflation-adjusted dollars.        al income of operator dwell-       moderate income growth.           crops are expected to see the
                                                                              Direct government pay-
      Net Cash Farm Income               ings — reflected in the net        ments are forecast to fall by     largest declines in 2022.
         USDA forecasts $168.5 bil-      farm income measure above.         $12.8 billion (49.7%) from  Farm Sector Equity
      lion in 2022, an increase of  Cash Receipts                           2021 to $13.0 billion in 2022.       Ag equity is expected to
      $22.1 billion (15.1%) relative        From the sale of agricultur- The decrease is expected  increase by $315.6 billion
      to 2021. The 2021 value was  al commodities, USDA fore- largely because of lower sup- (10.4%) in 2022 to $3.34 tril-
      $29.6 billion (25.4%) above  casts cash receipts to increase  plemental and ad hoc disaster  lion in nominal terms.
      2020.                              by $91.7 billion (21.2%, in  assistance for COVID-19 relief             Farm sector assets are fore-
         When adjusted for inflation,  nominal terms) from 2021 lev- in 2022 compared with 2021.              cast to increase $337.5 billion
      2022 net cash farm income is  els to $525.3 billion in 2022.          Total Production Expenses         (9.7%) in 2022 to $3.84 trillion
      forecast to increase by $13.5         Total crop receipts are ex-                                       following expected increases
      billion (8.7%) from 2021 and  pected to increase by $36.4               This number, including op-      in the value of farm real estate
      be at its highest level since  billion (15.3%) from their 2021        erator dwelling expenses, are     assets.
      2012.                              level following higher receipts    forecast to increase by $66.2        Farm sector debt is forecast
         Net cash farm income in  for soybeans, corn, and wheat.            billion  (17.8%)  to  $437.3  bil-  to increase by $21.9 billion
      2022 would be 34.5% above its  Total animal/animal product            lion (in nominal terms) in        (4.6%) in 2022 to $496.0 bil-
                                                            receipts are    2022.                             lion in nominal terms but it is
                                                                              Spending  on  all  categories
                                                            expected        of expenses is expected to rise   forecast to fall by 1.2% when
                                                            to increase     with the largest increase in      adjusted for inflation.
                                                            even    more    fertilizer-lime-soil conditioner     Debt-to-asset levels for the
                                                            from the pre-   expenditures, up 44%.             sector are forecast to improve
                                                            vious    year,                                    from 13.56% in 2021 to 12.93%
                                                            by $55.3 bil- Average Net Cash                    in 2022.
                                                            lion (28.3%),  Farm Income                           Working      capital,   which
                                                            following         USDA forecasts farm busi-       measures the amount of cash
                                                            increases in  nesses to fall 3.3% from 2021  available to fund operating
                                                            receipts for  to $98,200 per farm in 2022  expenses after paying off debt
                                                            all   catego- (in nominal terms). However,  due within 12 months, is fore-
                                                            ries of ani- the regional average net cash  cast to fall by 2.6% in 2022.
                                                            mal/animal  farm income outlook is mixed.            For more details, visit US-
                                                            products.         For farm businesses locat- DA's site.
                                                              These  ed in the Northern Crescent              Drovers
                                                            i n c re a s es  region, average net cash farm
      Courtesy of USDA
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