Despite ongoing uncertainty in the economy, now may be a time to consider investing in livestock futures given the generally favorable conditions being cited by government officials.
In its most recent Beige Book survey, the Federal Reserve notes that higher livestock prices in March helped increase profitability in this area, especially for cattle producers. The report added that prices are expected to continue rising based on lower supplies.
While livestock was seen as on the increase, the Fed added that crop prices had experienced downward pressure this spring because of the expectation of increased planting activity and bumper crops. The winter wheat crop was cited as being in good condition, and plantings of corn and soybeans were expected to rise this year.
Farmers and ranchers may both benefit from the Fed’s observation that “ample funds were available to satisfy rising demand for farm operating loans,” as well as the ongoing stability in cropland values, which were said to feature “limited sales activity.”
In fact, a Reuters report cited separate data from the Federal Reserve Bank of Kansas City which found that the value of farmland in the Central Plains region had increased 2 percent in the first quarter of 2010. This was said to be due to an improvement in livestock incomes as well as greater demand from farmers.
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