Texas ag leaders offer insight for new year

As we get ready to hang our 2005 calendars, Country World reporters asked several Texas leaders what they thought would be significant occurrences for agricultural producers and rural residents in the coming year. Here are the responses:

Dickie Hill, owner of F.E. Hill Co. and leader of the Freestone Co. Bull Test and Sale, was one of many Texas agricultural leaders who offered their thoughts about the coming year.

Susan Combs | Texas Agriculture Commissioner

Dec. 30, 2004 - What do you think is the most important thing ag producers and/or rural residents should be concerned about or be aware of in 2005?

"Considering that 2004 could be called the 'Year of the Downpour,' water availability will still remain an important topic for our farmers, ranchers and rural Texas in 2005. We must constantly ensure that agriculture has access to adequate water supplies for production purposes. In addition, the livelihoods of many of our rural communities depend upon water, and we cannot afford to turn off the tap on economic development by diverting water from our rural areas.

What are your hopes for ag producers/rural residents in 2005?

"Prosperity, profits and proceeds! I hope that Texas agriculture has a very prosperous New Year; that our producers get a fair return for their commodities and investments so that agriculture remains a profitable, attractive industry for the younger generation of producers."

Bill Mulligan | Deputy Executive Administrator for the Office of Planning Texas Water Development Board

One of the state's hottest topic for the coming year will be water - who owns it, who can use it, etc. When the Texas Legislature reconvenes, "water issues will be getting a lot of debate." Specifically, some issues with regards to water will be rule of capture and historical use.

"School finance (though) will be their first topic. It is going to be 140 days of work."

Shane Sklar | Independent Cattlemen's Association of Texas president

The most important thing facing rural residents and ag producers in 2005? "Our water supply. As fast as our state is growing, and the many needs we have for water in agriculture, municipalities, and industry, it is the top issue because the water will have to come from rural areas. I know most people in the country are aware of this 21st century dilemma, but they are not engaged in the process. Our rural residents have to get involved, because if they are not, I am afraid it could destroy our way of life in the long run.

Hopes for the coming year? "First of all, I want our cattle prices to remain strong. This benefits not only the rancher but the rural communities where they do business. A good agriculture economy makes for a good rural economy. If we can avoid any animal health issues and restore our export markets, I believe we can continue the good fortune we have seen in 2004.

"I hope all of our rural residents become more aware of the issues that are occurring around them. If they do not speak up, these decisions will be made on their behalf and most likely not to their liking. An informed rural population will lead to a healthy rural population in 2005 and for years to come."

Dickie Hill | owner, F.E. Hill Co.and leader of the Freestone Co. Bull Test and Sale

One area of concern that those ag producers raising beef must be concerned about is "Being Ready for Value Based Marketing/How Do We Get Ready?" A producer must know or decide what his/her target is and then obtain adequate statistical data, so that the target can be arrived at. Is the target the choice beef market, the select beef market or commercial replacement heifer market? Make no doubt about it, value based marketing is here today and already rewarding it's participant.

The percent of cattle not enrolled in some aspect of an added-value program will continue to dwindle to the place that there are very few, if any, rewards for not being a part. The added-value program one selects may be as simple as a VAC-45 health program, but whatever is selected will be a

significant part of the value that a producer receives. In most cases, this will, over time, determine the viability of any operation.

Jim Gill | market director Texas Cattle Feeders Assn

Beef prices will continue to be challenged by competing meats. Both pork and poultry supplies in 2005 will increase 2 to 3 percent above 2004 production levels. However, a continued strong consumer demand for beef, which will tend to keep retail prices steady, is predicted for 2005.

Fed cattle prices will trade from $80 to $92 in 2005. Specifically, the outlook shows fed cattle prices ranging from $85 to $92 in the first quarter of 2005; $80 to $90 in the second and third quarters; and $85 to $90 in the fourth quarter. That's a similar trading range to 2004.

Feeder cattle supplies will continue to tighten over the next couple of years, reflecting the liquidation that has been in effect since 1996. A 750-pound feeder steer averaged near $103.98 in 2004 - more than $15 higher than 2003.

However, losses in the packing industry are translating into lower bids for fed cattle in feedyards, which could put pressure on feeder cattle prices. It is likely the same 750-pound feeder steer will average in the mid $90s in 2005.

Looking at the grain markets, 2004 corn production is estimated at a record 11.9 billion bushels, which will put pressure on prices. Corn prices, which averaged near $5.04 per hundredweight in 2004 in the TCFA area, will likely be closer to the 2003 average of $4.75. However, a very strong export market will prevent prices from falling much below that level."

Larry Nickel | ag agent Texas Cooperative Extension Fayette County

I believe legislative issues that affect rural agriculture, including school financing, water issues, and the Trans-Texas Corridor will be the top things to watch in 2005. In addition, cattlemen need to stay on top of the animal identification issue and work to incorporate these plans into their operations.

Of course, with the new year comes a time for sharing hopes for the next 365 days. I hope ag producers have good weather, including timely rains, good production and increased prices for our crops, and continued good cattle prices.

Dr. Bob Hillman | State Veterinarian Texas Animal Health Commission

In 2005, premise and animal identification will be very important issues, as this animal movement tracing tool is implemented. For Texas cattle producers, regaining cattle tuberculosis (TB) accredited-free status is of concern, to enable Texas breeding cattle to move without TB tests or restrictions. We

still have some federal funds to pay for testing beef cattle in purebred or breeding herds. The dairy industry is to be commended for completing their testing; one infected dairy was detected, and that herd is being depopulated in Hamilton County.

On behalf of the Texas Animal Health Commission, I wish the very best to livestock and poultry producers for 2005. We hope to achieve cattle brucellosis-free status in 2005. Our wish is that Texas herds and flocks remain disease-free, and that the industry will have a profitable year ahead.

John Bradley | president Bradley Contractors Inc. Jefferson, Texas

For 2005, forecasts in the timber industry stem from various branches. "There are not enough loggers, but as long as the dollar stays down against the euro dollar, timber prices will be good. There is a huge amount of diversity in the timber industry and timber tracts are good."