As 2024 has concluded, many industry analysts will reflect on the market trends and forces that shaped 2024 to make improved decision making in 2025. This is a pivotal time to evaluate the factors influencing commodity markets and plan for the future. Market outlooks play a vital role in this process, offering agricultural producers and industry stakeholders valuable insights into price trends, production forecasts, and market dynamics. By analyzing data from government agencies, universities, and private firms, these outlooks help users anticipate and navigate market fluctuations, whether through short-term forecasts or long-term projections spanning decades. With advances in technology and greater accessibility, market outlooks have become indispensable tools for risk management, strategic planning, and marketing. In this article, we review a few features of market outlooks, explore key features of market outlooks, and then provide some practical tips for using them to manage risk effectively.
Crops:
- Corn: Prices fell to their lowest in almost 15 years from record production.
- Soybeans: Market dynamics have started to shift with announcements on biodiesel plants with the objective of capturing premiums in sustainable aviation fuel and evolving.
- Hay: Most states saw improvements in pasture and hay conditions, with hay stocks ending slightly higher nationally.
Livestock:
- Hogs: Prices have rebounded in 2024 driven by export demand, but closures of some major processing plants have dampened long-term prospects.
- Poultry and Eggs: Poultry and egg prices have recovered after the 2022-23 bird flu incident which reduced production and caused volatility for producers.
- Dairy Products: Dairy product prices have continued to climb this year. Cheese, whey, butter, etc. were all strong but bird flu testing has shaken the market since summer.
- Cattle: Feeder cattle producers experienced some of the highest prices since 2015, and in some states, record highs. However, fed cattle producers' profitability was mixed, influenced by feeder cattle costs and benefiting from lower corn prices.
Processors:
- Meat Processing: Faced their largest losses in a decade, with some plants expected to shut down next year. Total meat production stayed level with last year due to higher carcass weights.
- Ethanol: Ethanol plants were still not profitable despite lower corn prices.
The Role of Market Outlook
Historically, market outlooks were primarily the responsibility of university and commodity board economists, who provided impartial, third-party perspectives to help producers make informed production decisions. Their objectivity stemmed from access to marketing information, data, research, and a “nothing to gain financially from markets” approach. While the core purpose of outlooks remains unchanged, advancements in technology have transformed how producers access and use this information. Faster connections to market data and sophisticated tools for modeling and estimation have expanded options, leaving producers to navigate an array of outlooks and forecasts from both traditional and emerging sources.
