Farming and ranching.

• Author: Haynes, George
• Position: PRICES FALL BACK TO EARTH

Montana small grains and com producers experienced lower prices and revenues while the livestock sector enjoyed a period of profitability in 2015. Favorable weather over the summer resulted in average or relatively good yields for many wheat, barley and hay producers throughout most of Montana. The exception was northwest Montana, where drought conditions had an adverse effect on forage production. Near record levels of worldwide wheat production resulted in wheat prices that at harvest time in 2015 were more than 30 percent lower than in 2014. And barley prices trended downward through the spring of 2015, but rebounded by October to exceed 2014 fall prices by about 15 percent.

Hay prices have remained relatively stable around $120 to $130 per ton for the past couple of years. While lower wheat and corn prices have adversely affected revenues for many crop producers, they have also lowered feed costs. Although calf prices were lower than the record levels of 2014, they remain strong. Together with lower feed costs, high prices are providing incentives for some producers to expand their cattle herds.

CRAIN, OIL SEED & PULSE CROPS

In Montana, wheat production declined by 11 percent and barley production declined by 1 percent from last year. U.S. wheat production remained unchanged, while barley production increased by 18 percent. A strong dollar coupled with high domestic wheat prices drove 2015 wheat exports down to 850 million bushels, a post-1960 record low. A near-record global wheat crop has led to a relative glut of wheat on the world market, which has translated into lower prices for Montana producers. Lower com and soybean prices have led some analysts to suggest that wheat may look attractive to some U.S. farmers. Additional wheat production would likely continue to drive grain prices down. Futures prices suggest that wheat will be near historical averages and considerably lower than the near-record prices crop producers experienced between 2007 and 2014.

Hot and dry conditions in Montana...