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Utilizing USDA reports as a risk management tool

The USDA’s statistical reports are frequently used for ag marketing purposes, but a lot of farmers aren’t sure how the numbers are relevant to their side of the business.

Livestock market analyst Scott Brown with the University of Missouri says farmers can use the USDA reports to their advantage and they are a good indicator for any big movement in the market.  “Being able to pay attention to if we see just a little falter in demand or if supplies are going to grow a little faster than we thought,” he says.  “It ought to make us think about where we close 2017 in terms of prices and maybe it’s a chance to take advantage of some markets before they do turn much lower.”

He tells Brownfield when producers look at what has happened in the markets so far this year – prices are much higher than anyone would have projected.  “I don’t care if you talk cattle or hogs in this case,” he says.  “I don’t want market prices to lull producers into a false sense of security that for all of 2017 these prices are going to remain higher.”

Brown says 2017 has seen a large amount of supply growth and so far, he says, prices have been supported by strong demand.