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Corn+Soybean Digest

Livestock Agriculture: A Look Back And Ahead

The grain markets are ret hot with escalating land values and cash rents that are based upon producer and investor expectations that markets have moved to a new level plateau due to opportunities in renewable energy. On the livestock side, rapid transition is occurring, particularly in the past 10 years.

First, 60% of livestock revenue is generated in close proximity to a major metro area or a growing satellite city. These agricultural operations will seek new locations in regions that are livestock friendly from a regulatory and community perspective, with available water and land resources. “Migratory agriculture” and the “last harvest” concept, that is, selling land for development, will become common verbiage and raise contentious public policy issues in the near future.

Specific industries will observe rapid change. The hog industry has decreased from 142,000 farms to slightly over 56,000 in just 10 years. Ninety-five percent of production is from herds of 1,000 head or more.

The dairy industry has decreased from 125,000 herds to 70,000 herds. Small herds under 50 cows do and will continue to be sustainable with farm families that have modest lifestyles and little or no debt.

Beef cow-calf operations have seen a reduction from approximately 900,000 to 750,000 herds. Many producers operate small herds for lifestyle reasons or to serve niche markets if processing is available in the area. Feedlot numbers have remained about the same in the past 10 years, while layer and broiler operations have increased with contract growers.

It will be interesting to see what happens in another 10 years as consumer trends like natural, organic and local drive business models and farm rural lifestyle balance becomes more prominent.

Editor’s note: Dave Kohl, The Corn And Soybean Digest Trends Editor, is an ag economist specializing in business management and ag finance. He recently retired from Virginia Tech, but continues to conduct applied research and travel extensively in the U.S. and Canada, teaching ag and banking seminars and speaking to producer and agribusiness groups. He can be reached at sullylab@vt.edu.

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