Outlook good for ag in ’97

An easing of grain prices will help hold livestock prices steady and keep Colorado dairies operating in 1997, agricultural analysts predict.

“Weld County, which is so dependent on livestock, will be helped by lower prices of grain,´ said University of Northern Colorado associate professor of economics Ann Garrison.

Record prices for 1995 corn, which sold for about $3 a bushel in 1996, were offset by low volume. Relatively little, 426 million bushels, was available to sell at that price.

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The Colorado Department of Agriculture predicts that in 1997, expanded acreage for corn will lead to lower prices, about $2.75 a bushel. Volume will be up, though, with the carryover from ’96 to ’97 up to 1,157 million bushels, Garrison said.

Hail and drought battered the 1996 Colorado wheat crop, which amounted to only 75 million bushels. If 1997 weather is more favorable, the wheat crop could bring in as much as $370 million statewide, despite an expected price drop from the current $4.80 to about $4.30 next June.

All of this is good news to anyone who is feeding cattle. While Colorado experts still foresee low profits compared with the nation as a whole, 1997 should bring some improvement over the previous year here.

Lower costs will be a more important factor in increasing profitability than prices, which will hold steady, Garrison said. The Colorado Department of Agriculture estimated in its year-end report that the number of fed cattle marketed next year will be up to 2.4 million head.

Because of liquidations and drought in 1996, the number of calves produced in Colorado will be down and prices up by about $7 per hundredweight. Even so, most cow-calf operators will still show a loss in 1997, the Agriculture Department predicted.

Colorado lamb prices reached an all-time high in 1996 and are expected to be off only slightly in 1997.

The dairy industry is experiencing a crisis nationwide because of plunging milk prices and low governmental price supports.

“Because of cost containment, locally they’ll be just fine,” Garrison said. “Colorado dairies are exceedingly modern. They operate on economies of scale.”

Producing in large quantity, they make the most of a slim profit margin. The lower cost of feed grain will help dairies, too, in 1997.

Bean crops in northeastern Colorado suffered under heavy rains at harvest time. Sugar-beet production is expanding.

Colorado farmers added more than 10,000 acres in 1996, and they expect to add more in the coming year.

Colorado is now North America’s leading producer of hothouse tomatoes, the Department of Agriculture reported. Other greenhouse and nursery sales continue to expand as the state’s population grows, led by a demand for sod and landscaping plants.

The “Freedom to Farm” Act goes into effect in 1997. It will phase out government payments, limits on planting and price supports and for many crops over the next seven years.

As a result, the grain shortage will probably ease, according to the Agriculture Department report. Removing limits on grain production is also widely expected to create swings in supply and prices nationally, Garrison said.