Dave Swarz of the Penn State Extension received the Staff Laureate Leadership Award last year from Penn State’s College of Agricultural Sciences for “exhibiting sound judgment and exemplary problem solving.” Although he made his remarks at a beef meeting, he talked about Ag commodities because “they are all in some way or another associated with, and affect, beef prices.” He began by stating the U.S. has had three bin-buster corn crops in 2014, 2015 and 2016. “2016 set a new record for production per acre in the country,” he said. “There wasn’t too much of a drought in [south central Pennsylvania] but last year the drought certainly affected the Pennsylvania average.” Last year’s new record was about 175 bushels per acre. And there was a new overall crop of 15 billion bushels in the country. From the Civil War until 1936, the corn average in this country was 35 bushels per acre. During the next 40 years the yield of corn doubled. That was largely due to widespread fertilization, hybrids and chemical pesticides. The next generation saw corn production nearly double again. The challenge for today’s young farmers is to double the yield of corn once more. “It seems impossible to think about now that we would have a national average of corn which would be 350 bushels to the acre,” Swarz speculated. “Who knows what technologies might be discovered?”
Soybeans are essentially the same story with bin-buster yields. A new record was set in 2015 of 48 bushels per acre. Last year that figure was eclipsed with a national average of 52 bushels per acre. By percentage, soybeans are the largest commodity the U.S. exports. “Because other countries have such demand for plant protein,” Swarz pointed out, “those of us who are in the dairy, cattle, hog and broiler industries are not seeing the drop in soy meal prices that we expected with such a large crop of beans because so much of it is going offshore. In Pennsylvania, because three quarters of our agriculture receipts are animal agriculture, we have a net deficit per year of 700,000 tons of soybean meal…Even with [the Perdue plant] opening up, we still are going to have to bring in soy meal from out of state.”
Looking at beef, the USDA says last year for all grades of cattle, the average price per hundredweight at market was $121. Two years earlier, in 2014, the all-grade average sale price for finished cattle was $154 — a 22 percent decline in two years. Over the past few years, there has been a tremendous decrease in market price, even factoring in the $100 per hundredweight predicted for this year. “The forecast for red meat production and poultry production for this year: beef was expected to be up four percent; pork up over three percent; and broilers up just two percent,” said Swarz. “If you’ve been in this game for awhile, you know that broilers are often the ones that are much higher than beef and pork. What this means is that there will be an additional 2.5 billion pounds of beef coming on the market this year. So we’re going to need a strong export market to clear that from our domestic market.” Americans eat about 200 pounds of these products per year per person – 90 pounds of chicken, 40-some pounds of pork, 50-some pounds of beef and about 15 or 16 pounds of turkey.
Turning to pork, Swarz said, “the national herd has recovered well from that disease that was affecting baby pigs a few years ago.” Called PEDv (Porcine Epidemic Diarrhea virus), the disease killed anywhere from five to 10 percent of the nation’s pigs, according to the National Pork Producer’s Council. Pork prices at that time reached record highs. “As a result, the pork herd has just expanded in ways that no one could have predicted. We have more pigs on the ground right now in America than we have had since the middle of World War II.” That is roughly 71 million pigs which is four percent above last year. In 2016, a new record was set for piglets that come from a sow in one year — 21. Forty years ago that number was 10. “Someone who is concerned with animal rights and animal welfare looks at that and says, ‘You people are horrible because you’re making these sows into nothing but piglet factories. They’re either bred or pushing out piglets or pregnant; they never have any decent days in their lives.’ But I look at that also and say that ‘because of those kinds of efficiencies, we are able to put protein in the diets of millions of people around the world who would never have had a chance previously to have a small amount of animal protein in their diets.’” Swarz went on to say the average price for pork this year is expected to be around $39 per hundredweight, or about half the price three years ago, due largely to the tremendous supply of pork.