The outlook for New Mexico agriculture for 2015 provides mixed projections throughout the livestock, dairy, forage, vegetable and cereal crops industry, according to a New Mexico State University agricultural economist.
“Many factors that impact these markets are changing as the world economy continues to grow,” said Jerry Hawkes, NMSU Extension Animal Science and Natural Resources department head. “World population estimates and global economic growth will contribute to export growth in many agricultural markets across New Mexico. Overall, a financially positive year should be in place for New Mexico agriculture in 2015.”
Beef cattle markets in New Mexico will continue to show strength across all classes of cattle.
“Short supplies coupled with a strong fed-cattle market will drive the beef cattle model for 2015,” Hawks said. “Prices are anticipated to show moderate growth in 2015, but not significantly greater than 2014.”
Range conditions across New Mexico will be key indicators of future beef cattle numbers for the state.
“Currently, beef cattle numbers are reflective of many regions of the United States as producers continue to work through the restocking process created by extreme drought conditions,” he said.
New Mexico’s dairy industry has continued to build from the financial challenges of recent years. Milk prices for the producers are anticipated to soften in the first-half of 2015 from levels experienced in 2014. Projections improve for the industry for the second half of 2015, with moderate price recoveries anticipated.
“Primary input prices, such as alfalfa and corn silage, will reflect prices that should be relatively stable from levels experienced in 2014,” Hawkes said. “The combination of prices received and input costs should allow the industry to break even, or even post moderately positive financial outcomes for New Mexico producers in 2015.”
Mixed price expectations are in store for New Mexico forage, vegetable, cotton and cereal grain producers in 2015.
“Wheat inventories are at the highest level in several years, and this continued growth in the world market will keep wheat prices in check for 2015,” Hawkes said. “Corn prices plummeted more than 15 percent in 2014, and should rebound moderately in 2015 with global market demand projections.”
Alfalfa and corn silage contracts are anticipated to remain in the same range as experienced in 2014. The cotton market is expected to become more bullish than experienced in 2014.
“This is primarily due to reduced international supplies and continued growth in the world economy,” said Hawkes.
Vegetable prices are difficult to anticipate, with the market adjusting rapidly throughout the harvest season.
“Green and red chile prices are expected to be similar to those experience during the contract season of 2014,” Hawkes said.
Global economic outlook is an important factor in an ever-increasing world market. World economic growth is expected to be 4 percent, advanced economies growing at a rate 2.4 percent and the United States projected growth rate, 3 percent.
“Growth in developing nations is an important function for the demand of agricultural commodities,” Hawkes said. “Citizens of these growth regions often demand a more diverse and enhanced diet as income levels increase.”
Hawkes concludes that world demand, a recovering economic situation and lower input prices should all combine for a positive financial year for agriculture in 2015.