Page 10 - MWC 9-15-2022s2

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