
SUNUP - Dec. 30, 2023
Season 16 Episode 1627 | 27m 49sVideo has Closed Captions
THIS WEEK ON SUNUP: End of the Year Wrap-Up
This week on SUNUP: Amy Hagerman, OSU Extension agricultural policy specialist, reviews the challenges producers faced over the past year and then discusses the possibility of a new farm bill.
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Problems playing video? | Closed Captioning Feedback
SUNUP is a local public television program presented by OETA

SUNUP - Dec. 30, 2023
Season 16 Episode 1627 | 27m 49sVideo has Closed Captions
This week on SUNUP: Amy Hagerman, OSU Extension agricultural policy specialist, reviews the challenges producers faced over the past year and then discusses the possibility of a new farm bill.
Problems playing video? | Closed Captioning Feedback
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Learn Moreabout PBS online sponsorship(upbeat music) (upbeat music) - Hello everyone and welcome to "Sunup".
I'm Lyndall Stout.
It wouldn't be the end of 2023 without our annual year-end wrap up show where we spend some time looking back at the past 12 months and looking ahead at what could be in store for the new year.
We begin today on the topic of ag policy.
Here's Sunup's Curtis Hare with Dr. Amy Hagerman.
- It seems like every year I say the same thing, that it's hard to believe that this year was over and all that happened.
So Amy, let's kind of go over all that happened in 2023, what would you like to start with?
- So, I really think the beginning of the year, we were talking a lot about drought recovery.
We were talking about disaster, we were talking about wildfire risk, and we were really focused on our programs well designed for those kinds of things that are happening here in Oklahoma and how can people use those different kinds of programs, the FSA or NRCS has available in this year?
Then as we kind of got through the year, we started to talk about this emergency relief program, which is that last tail end of the Cares Act money from 2020 for both farmers in the Emergency Relief Program, but then also livestock producers in the Emergency Livestock Relief Program and helping producers think through those applications.
We've also had some additional pandemic assistance through the PARC program that producers could apply for.
So it's really sort of been this cleanup of different kinds of programs in the coming year.
Then as we got towards September, obviously we started thinking about the farm bill expiring and what could that potentially mean going forward through the end of this year.
So that's been a lot of what's been happening this year.
A lot of conversation, not a lot of action in 2023.
- Yeah and you're also jogging my memory too, because producers had to face a lot of different types of issues.
You had, like you said, drought, wildfire, and then you had tornadoes.
And then there was then flooding and then the rain came along these past couple weeks.
So it's just been kind of a big year for producers.
But you mentioned the farm bill, let's start there.
What's going on with the farm bill?
- So we do have an extension of the farm bill for the next 12 months, kind of at this last negotiation in the budget going forward for the rest of this fiscal year, they were able to put in that extension of the existing farm bill for 2024.
What does that mean?
That means programs will look exactly like what they did in 2023.
So as you're applying for your agricultural risk coverage or price loss coverage, those will look very, very similar.
If you're looking to apply for disaster or emergency assistance, those will look very similar.
If you're looking to apply for the Conservation Reserve Program, it'll look pretty similar to the last year.
It provided some assurance and continuation for the next year as they go through these additional negotiations for the farm bill.
And there's a lot to consider there.
This is a very expensive farm bill potentially as compared to what we've had in the past.
Why?
Because we all just know everything seems to be more expensive right now, whether you're talking about costs of production and your seed and fertilizer, whether you're talking about machinery, everything just seems to be more expensive right now, the food we see in the grocery store.
So there's a lot of conversation happening there, especially in an environment where we're really cost sensitive in Washington DC right now and how much things are gonna cost and what government spending is going to look like.
- And there's a new presidential administration that's gonna be coming in soon so it kind of feels just like from the outside looking in that there could be an issue with just bad timing maybe with maybe the new farm bill.
Is there any worry or sense there?
- So if you look historically in other farm bills that have been negotiated in the year of a presidential election, the farm bill is by its very nature, bipartisan.
You really have to bring both parties together to successfully put together a farm bill and to negotiate that farm bill.
That can be more challenging in a presidential election year or an election year in general.
So that may mean that more negotiation is happening.
That may mean those negotiations are a little bit harder, and also you're got attention diverted away from the farm bill because of campaigning as well.
So if we don't see a farm bill by about March thereabout, as we get into primary season, the attention may really focus away from it for a bit of a period of time, and it may actually be after the election that we see a farm bill happen.
- So January 1st is just a few days away, obviously.
So with that in mind, in the short term, is there something that producers and landowners need to be considering when it comes to like all these different types of programs that are gonna be restarting?
- Yeah, so I think just making those decisions.
We kind of held off, usually we start making decisions in October on a lot of these programs.
We really couldn't in October because we didn't know what it would look like for the next year.
So it's making all of those decisions and making sure that we make them going into that first month of the new year.
So January 30th is actually a really important deadline for a lot of programs, for our Livestock Forage program, for those producers or in counties that are eligible for that, that application is due January 30th.
We had talked about all the disasters that happened in the last year.
So for the Livestock Indemnity Program and the Emergency Assistance for Livestock Honeybees and Farm Raised Fish, the ELAP.
- that does the hay hauling, and the water hauling, and the bee losses, that has also been extended out.
That's January 30th now too.
And really, in an interesting, very recent piece of information, the USDA has actually relaxed their notice of loss reporting rules, - Oh, okay.
- on LIP and ELAP.
So what that means is that if your application was rejected earlier in 2023 because you didn't notify for the loss within that 30-day window, they might actually reconsider that application.
If it was rejected for other reasons, obviously that's different.
Or if you just missed the notice of loss window, and so you didn't put in an application, well, now that's been relaxed a little bit.
Just trying to make these things more user-friendly for producers.
A lot of that happens by January 30th, and we're thinking about those year-ends, making sure people have their crop reports all in, all taken care of for the next year.
Making sure that any kind of insurance deadlines, that we're watching those, we're meeting those.
Those are different for different crops, so we've gotta watch those individually for the individual crops.
- And for those producers, for our crop producers out there, now's actually a really good time to do it.
Things are slowing down.
Our summer crop harvest is already in the bin, wheat's kind of laying dormant for another couple months, so this is really a good time to do that.
- Yeah, it's a great time to go back and revisit the paperwork.
I also feel like January 1st is a really great time to just, in general, revisit your risk management plan for your farm.
Your insurance, making sure your coverage is good, making sure that it's covering the kind of equipment and the value of the equipment that you have in the barn now, right, because that's a big deal.
Just making sure that your insurance coverage looks good for the next year, it's a great time to do that as well.
And then, also thinking about what your risk management plan is going to be for the next year.
How will these different programs fit into that?
- Cause things are gonna change.
We know that.
It's Oklahoma.
- That's guaranteed.
- It's gonna change.
(laughing) - It's guaranteed.
Thinking forward, what is my risk management for my operation gonna look like?
That's just a great way to start your new year.
- Alright, thanks Amy.
Dr. Amy.
Hagerman, ag policy specialist here at Oklahoma State University.
(upbeat music) - We're continuing our year-end discussion now with our ag economists, with Dr. Derrell Peel, our livestock marketing specialist.
Derrell, once again, an eventful year in the cattle markets.
Let's kind of recap 2023.
- Yeah, 2023 really started to see kind of the things that have been building for the last several years really start to take a hold.
And I guess that's most, best expressed by the tremendous run up we had in prices.
It really started at the end of 2022.
For the last year, we had a tremendous run up.
Now obviously, later in the year, we had some sort of nervousness develop in the market.
But all in all, we're still well above where we were a year ago.
Beef production, which was at a record level in 2022, really as a result of the liquidation in the cattle herd that we had in 2021 and 22, changed as we knew it would.
And so we started to see beef production decline in 2023, and that sets up where, the situation that we're gonna be in for the next couple of years.
- Let's kinda look at where we are now as we're winding down the year.
In terms of moisture and rainfall, we're in much, much better shape than we were a year ago at this time.
- Yeah, absolutely, kind of starting to see, we're waiting to see how the El Nino thing is gonna play out here for the winter, but I think we're seeing some of those impacts late in 2023.
All in all, 2023 was a better year compared to the previous two years.
We had intermittent periods of drought in 2023, but we made a lot more hay and certainly as we end up the year, we've had some rain, we've got pretty good wheat pasture conditions for the first time in quite a while.
And so we've got some opportunities for winter grazing that we really rely on here in the southern plains.
- As we're at the end of the year, how are markets looking overall?
- Markets are, still again, well ahead of a year ago, so, in that sense, we're looking good.
At the end of 2023, we saw some real corrections develop in the futures market, and I think that came out of just the fact that we'd had such a run up, and so there was some opportunity there for some profit taking.
But it was really compounded by the fact that we had a lot of geopolitical events and a lot more concern develop about the general economy in the US and the potential for problems.
We haven't really seen those problems at this point in time, but there's a lot of concern about that going forward.
We ended the year on a little bit more of an uncertain note I guess, but, uncertain at a much higher level.
We still really haven't changed the overall market fundamentals here, in terms of the tighter cattle supplies that we have, the decrease in beef production that has happened and will continue as we go forward.
- And of course that situation right there is translating to the consumer still when we're at the grocery store.
- Yeah, absolutely.
We've continued to see retail prices very strong.
Concerns about demand is one thing, but the fact is that with tighter supplies, we're probably not gonna have much of an opportunity to see any real relief, if you will, in retail grocery prices.
- Consumers will eat less beef because we're not gonna produce as much beef.
But that doesn't mean that demand isn't there.
It just means that we don't have as much beef to go around.
So we're gonna ration it in the marketplace.
- This is the part of the conversation where we like to look ahead to the new year.
So what's your outlook for 2024?
- Yeah, as we go into 2024, I think we're gonna see the general situation continue to develop.
The main thing probably going forward is that we're gonna have even smaller cattle inventories in 2024.
We don't have the official numbers yet.
We won't until, a month into the year.
But it's pretty clear from the slaughter rates that we had for cows and heifers in 2023.
They did decline, but they didn't decline enough to suggest that we're actually rebuilding the herd yet.
So that's one of the things that we're still looking for is when do we start that process?
Cattle numbers will be smaller going into 2024 and in terms of the squeeze or the availability of feeder supplies, which then go into feedlots and ultimately turn into beef production, that's gonna get squeezed a lot more at some point in time when we start retaining heifers to rebuild the herd.
So I look for a lot more supply pressure, if you will, that'll support the market.
It's gonna support higher prices for cattle, it's gonna squeeze beef production as we go forward because we're gonna keep those heifers for breeding rather than running 'em through the feedlots as we have been.
And so beef production will decline another six to six and a half percent probably in 2024.
So we're gonna continue to see a lot of supply pressure building on the market.
The biggest unknown going forward again, will be kind of the demand side.
I think we have to keep an eye on those outside market factors, the broader geopolitical events that impact not only the reality but also perceptions and fears and uncertainty in the market.
Those will be big factors as we go into 2024.
- Well, let's talk about trade now and kind of give our viewers some context on what you're keeping an eye on and what they need to keep in mind as the year progresses.
- Yeah, trade reacts to the market situation as well.
So in 2023, we started to see some decrease in beef exports under tighter supplies and higher prices that will likely continue in 2024.
Now it's impacted by the strength of the dollar as well.
That adds another layer of challenge, if you will, for foreign customers.
We've had a strong dollar certainly through most of 2023.
We'll see how it goes forward in 2024.
Changes in the exchange rate could have an impact.
On the import side, again, as supplies tighten up in the US particularly supplies for processing beef, which supports our ground beef market.
That happens when we cut cow cuing, if you will, to start herd rebuilding, then we'll probably see more imports coming in, in terms of processing supplies.
And that marginally changes the supply in the US it's the market response to tighter supplies and higher prices in the US.
So we expect to see those numbers, but it doesn't really change the fact that we're in a very tight supply situation in the US.
- Well, lots of great information.
Of course Darryl, we like to leave things with guidance for producers as they're planning ahead for the new year.
- Yeah, producers, depending on your current situation, some producers in and certainly outside of Oklahoma there's still drought around.
So we're maybe dealing with sort of those constraints on what we can do in other situations we're recovering from that.
So, those resource constraints are an important part of it.
Financial perspective is important as well.
But I think, all in all we've got a fairly sort of bullish scenario set up here, not only for 2024, but for, at least a year or two after that.
So I think producers want to sort of think about how they want to be positioned to take advantage of that and think about the things they can do from a cost management standpoint and from the overall herd situation that they find themselves in to be able to take advantage of the market opportunities that will be out there.
- Okay, Darrell, thanks a lot.
That winds down 2023.
We're so glad you're part of Sunup and happy new year to you and your family.
- And to you too as well.
- Thanks a lot Darryl.
(upbeat music) Like you, we always look forward to Cow-Calf Corner, and this week Dr. Mark Johnson is also taking a look back at the past year.
- Good morning Oklahoma, and welcome to Cow-Calf Corner.
This week's topic is review of the year 2023 and for those of us in the cattle business, it's been a good year.
It's been a year that it looks like we'll close out at a profitable margin in all sectors of the cattle business, the cow-calf sector, the stalker yearling sector, as well as the finishing sector.
And that is indeed truly rare.
It's been a year when some timely rains and good pasture management allowed our grazing lands to heal, and our hay inventory ebbed a little bit higher.
As well as we think of the national cow inventory at this point, we have a cow inventory the lowest in about 61 years, that indicates the value of all categories of cattle is gonna remain high for some years to come.
As we reach the end of 2023, and think about all we've got to be thankful for, I consider.
- A few things to reflect on as we move forward to the future.
The first is, while we know that cow inventory is gonna help our cattle prices for a while to come, and it doesn't look like we're yet in an expansion phase where we're gonna see the cow inventory increase anytime soon, that remains an uncertainty.
But one thing that is for certain, if we're gonna rebuild cow inventory, there's opportunity.
And then we can rebuild with a better cow herd.
And what do I mean by this?
Through selection and mating, we can actually end up with a set of cows, that with regard to their mature size, their level of milk, their fertility, their breed composition, that fit our production environment and our marketing plan better.
And so, the last few years in herd liquidation, leads to an inventory as far as building back better.
Second thing to keep in mind, it is beyond the cattle, a grazing ecosystem.
We also need to keep in mind the soil and the plants.
As we think about the future, and potentially upping our cow numbers, we wanna manage pastures to give them the competitive advantage over grazing pressure.
Maybe that means we remain under stocked for a while.
Perhaps that means we let that grass get ahead of the cows before we turn out on it in the spring.
But the point is, we want to permit some time, for grazing lands to recover from drought.
It's not an immediate process.
Third thing to keep in mind is, as we rebuild our cow numbers, we want to consider the input cost, the interest rates, and the feed stuffs that we've got on hand, relative to proper stocking rates, and what can lead to profitability for us.
And finally, as we think about the future, the key to profitability long term in the cow-calf sector, is the amount of grazable forage we can produce, and finding a balance between that, and our level of production, or particularly our stocking rate and mature cow size, and how well that fits the amount of forage we can reasonably produce year-to-year.
In conclusion, I want to thank all the cattlemen and cattle women, and ag producers overall.
They are responsible for us being able to produce the highest quality beef in the world.
And as American citizens, we spend a very small percentage of our disposable income on food.
Merry Christmas and Happy New Year to all of you, and best of luck in 2024.
Thanks as always for joining us this week on "Cow-Calf Corner."
(cheery upbeat music) - We're continuing our year-end discussion with our ag economist.
Joined now by Kim Anderson, crop marketing specialist.
Kim, let's start with a general overview of the marketing year.
How did 2023 look overall?
- You go back to January, I think the market came in, getting over the COVID.
I think we've pretty much cleared all the market impact from the COVID from 2021 and '22.
but the Russian and Ukraine war was still having an impact.
I think as we went across the year, we'd pretty much taken that outta the market.
The market understands what's going on there, and anticipates how much commodity we're going to have coming outta that area.
Then you got input costs.
Input cost had risen quite a bit in 2022.
They came down some in '23.
So you got your fuel, your fertilizer, your chemical cost coming down throughout the year.
I think that is putting us in a better position.
And then you've got the farmers and bankers adjusting to all the price and income variability that we've seen over the last couple years.
The increased investment we have in producing the crops now, and that increases risk.
And then throughout the year we had interest rates increasing, and so we're adjusting to that.
- Let's kind of take some time to look at crop-by-crop.
Starting with wheat.
What did 2023 bring for the wheat crop?
- Well, the wheat come, we started the year $8.
We got up into the 8.50, 8.75, wallowed around the, the 7.50 to 8.50.
And those $8 prices held through the harvest.
So, just late July, early August, we broke, took about $1.10, $1.20 off the market.
It came all the way down to the end of the year, where we got down to $4.34 from up about 8.35.
We took almost $4 off that price, and it looks like we bottomed out.
You look at production for the year, the world, a near record at 28.7 billion bushels, above average the US crop at 1.8 billion bushels.
You look at ending stocks for the world, 9.5, the average is 09.6 to 10.3, somewhere in that vicinity.
So below average world stocks.
Below average US stocks, 6.80, versus an average of 8.50.
Our price is about 5.80 to 5.90 over the last 12 years.
And our prices are slightly above that.
- How about corn?
- Well, you look at corn prices kind of like wheat prices.
We started up around 5.50 earlier in the year, but corn prices broke faster than wheat.
You know, wheat held through the July, August time period, corn, I wouldn't say.
Going down all the way into July, had a little rally there just before harvest, and then corn prices coming back down to the 4.50, 4.40 level.
- You look at production, record world production, US production, oh, just about average near record, but not quite.
Ending stocks increased for the United States, 2.1 billion, averaged 1.7, so big stocks there.
You look at world stocks, right at average, slightly lower than last year.
You look at the price, our average corn price from 2009 through '23 is about $4.80.
Current price is around $4.50, $4.60.
With all the stocks we've got, I think that's what you'd expect prices to be with corn.
- And then let's take a look at soybeans.
- Oh, that's the good news.
Soybean prices, they were relatively high.
They did break, oh, mid-year, and then they came back up into the $12.50, the $13.40 or so range, holding around $12.
You look at production, record world production and US production for beans.
Ending stocks for the world still are above average right now, but US ending stocks for beans are tight.
And so, world kind of tempers our price a little bit.
Average price from '09 through '23 is, oh, around $10.80.
Our prices, oh, $12.50, $12.60.
So that's probably where it should be and we'll have to see where it goes from there.
- And then last but not least, cotton.
- Cotton prices, they've been relatively good.
Volatile like the other markets and maybe cotton a little more volatile than your wheat, but they were holding relatively good, oh, from around 76 up to near 90.
So started out with good cotton prices.
Lately, over the last couple months, they've come down to the 78, 79 cent range.
- That's a good recap of the year that we've just experienced.
Let's kind of look ahead now to 2024 and some of the things you're keeping an eye on.
- Well, we're keeping an eye in on those stock situations and with wheat, relatively tight stocks in both the world and in the United States.
So we'd expect wheat prices to be above average.
Like I said, that average wheat price of $5.80 and $5.90 from '09 through '23.
Right now, you even forward contract for right at $6 for a harvest delivery.
I calculated another way, I looked at the change from one harvest to the next and came up with a predicted price of $6.20.
So around $6.20, $6.25 for a '24 harvest.
I put a range around that though from $4.50 to $7.50, and I think there's more potential on the upside than there is on the downside because if something happens in the Russian-Ukraine or the Black Sea area, those prices are going to go up.
You look at corn right now, oh, you can forward contract around $4.90.
That's about 20, 30 cents above current prices.
Range for corn, $4.60 to $6.90.
And again, it might not be enough 'cause the markets are volatile right now.
Soybeans, a forward contract around $12.
The range I've got on that is $10.50 to $14.
- Okay, lots of ranges there.
We like to kind of wind down the year, and look ahead for the new year, and end things with a little bit of guidance for our viewers, our producers in Oklahoma.
What kind of words of Kim wisdom do you have for them as they sort of plan ahead for the new year?
- Well, like we started with, it takes more investment, much higher investment now to produce wheat, corn, beans, and cotton than it did several years ago.
However, that's no reason to get out of business.
I think you've got to produce a crop before you can make any profit.
Concentrate on managing cost, concentrate on producing a commodity that both the United States and the world wants to buy, and the price will take care of itself.
- All right, Kim, thank you very much.
We want to say a special thank you this time of year for being on "SUNUP" week in and week out throughout the year and the happiest of holidays and happy New Year to you, and Catherine, and your family.
- It's a pleasure to work with you and the producers in the state of Oklahoma.
- Okay, thanks a lot, Kim, and we'll see you next week.
(upbeat music) That'll do it for our show this week and for this year.
On behalf of all of us here at "SUNUP," we want to thank you for tuning in and for trusting us to bring you information and stories about Oklahoma agriculture.
I'm Lyndall Stout, have a happy New Year everyone, and we'll see you next time at "SUNUP".
(gentle riff)
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