Dear Fellow Nebraskans:
As we enter the first weeks of summer, a very interesting discussion has been taking place about the growing global demand for food and the impact of rising prices on American consumers. Here at home, many farmers are facing excess rain and storm debris in their fields, but demand for the products grown and raised in our state has been strong. As a result, prices for nearly all feed and food grain commodities are at or near historic levels.
Comparing today’s situation with a few years ago, corn, soybean and wheat prices have more than doubled. We can be glad these producers have had more favorable conditions during the last year, because for many years the seeds they put in the ground were for crops that were valued below the cost of production.
While the current market is very strong for crop producers, there is another reality for those who work in the livestock sector of our agriculture industry. For those producers, the increase in corn and soybean prices has created challenges.
Higher feed costs are just one of several factors that have cut profits for Nebraska’s pork and beef producers. For pork producers, their hog production costs are up more than 50 percent. Poultry producers are facing similar increases and rising feed costs have increased beef production costs by 25 percent or more.
The nature of the agriculture industry is that there will always be sectors facing difficult circumstances. Ten years ago, pork prices plummeted so drastically there was no money in raising hogs. Today, pork producers are in the unique situation of having strong prices and good export demand. If not for higher input costs, this year would likely be a more robust year for this segment of our agriculture industry.
Higher costs affect everyone. Increases in gas and diesel will reduce some of the gains for those selling crops. Seed and fertilizer costs are also up significantly. The larger challenge may be that when grain prices moderate, input costs may not go back down.
These hurdles are why we continue to seek out new opportunities to promote and sell Nebraska agricultural products in other countries. It’s why I asked the U.S. Department of Agriculture to purchase pork for its food assistance programs earlier this year and why I continue to say our state needs our livestock, crop, and ethanol sectors all to be successful
Our producers know there will always be challenges to face; whether it’s too much rain or not enough, a door closed to trade, or increasing demand in a world of tightening supplies. In spite of these challenges, Nebraska’s agriculture industry has become one of the strongest in our nation because our farmers and ranchers put the interests of their communities and our state ahead of one sector or another.
Our grain and livestock sectors depend on each other. One does not succeed without the other. The way to move forward is for our agriculture industry to remain united in advocating for thoughtful policies that will help this industry adapt to changes in the global marketplace.
Remaining united as one agriculture industry is critical to making our hopes for a stronger state a reality in the days to come, and I have confidence that our state will continue to move ahead.
