Will the Prices be Higher, Lower, Steady?
The big question alluded to above is whether commodity and livestock prices in 2023 will provide opportunities for producers to secure positive returns. On the crop side, prices for corn, soybeans, and wheat are higher entering 2023 compared to a year ago (Figure 4). Recent Nebraska cash bids for corn and soybeans were roughly $1.00/bushel higher compared to last year while wheat was $0.30-0.40 higher. January’s USDA World Agriculture Supply and Demand Estimates (WASDE) projected ending stocks for the marketing year would be lower, primarily due to lower production estimates. Domestic usage and exports for both corn and soybeans were also projected lower. The season-average corn price received by producers is estimated at $6.70/bushel compared to $6.00 last marketing year, while the average soybean price is estimated at $14.20/bushel, up from $13.30 the prior marketing year.
Figure 4. Nebraska Crop Price Indices (Through November 2022)
Source: USDA National Agricultural Statistics Service
Fed and feeder cattle prices are higher transitioning into 2023 as well. Prices for 500-600 lb. feeder steers in Nebraska last week were nearly $220/cwt. compared to $195 a year ago. Prices for live steers were $156/cwt. compared to $139. Retail beef prices are higher too. Livestock Economist Darrel Peel of Oklahoma State University reports the Choice boxed beef price is up 6 percent compared to last year. However, the latest Meat Demand Monitor produced by Kansas State Agricultural Economist Glynn Tonsor showed a dip in domestic beef demand in December. This follows four months of neutral to declining retail demand. Lower beef production this year, projected to be down over 2 million pounds, will keep upward pressure on beef prices, but shifts in beef demand could counter the pressure. The USDA projects 2023 beef exports at 3.09 billion pounds, off 500 million pounds compared to 2022, mostly due to lower beef production.