Ag sector faces headwinds from costs, commodity prices
Agriculture, a mainstay of the economy in Weld County and in Colorado in general, continues to face headwinds with high production costs and lower crop prices — both of which are expected to continue in 2024.
The farm economy has taken on a wide variety of forms throughout Northern Colorado and the Boulder Valley.
Legacy farms and ranches have been sold over the past few years, including the Diamond Tail Ranch in Larimer County, which sold in 2023 for $46.9 million.
JBS’ chicken-packing subsidiary Pilgrim’s Pride Corp. is also headquartered in Greeley, and the company acquired the Mountain States Rosen lamb-packing plant in the city in a July 2019 bankruptcy action.”
The cattle industry, according to research compiled by the Leeds School of Business at the University of Colorado Boulder, has helped sustain many operations because of generally high beef prices.
New forms of agriculture have taken root in the region. Companies such as Gotham Greens Farms LLC opened a 120,000-square-foot greenhouse in the Great Western Industrial Park in Windsor to raise lettuce and other crops marketed in supermarkets nationwide. Meanwhile, Intelligent Growth Solutions, a Scottish company, located its U.S. headquarters at the Forge campus in Loveland. The company produces agricultural infrastructure used in vertical farming.
A Boulder company, Mad Capital Group PBC, formed to invest in regenerative farms.
The Leeds School reported that optimism in the farm sector is declining as farm incomes have declined as much as 23% in 2023. That’s slightly better than the ag scene nationwide but still a concern to the industry. Statewide, net farm income for 2023 was about $1.7 billion and is expected to tick up to about $1.97 billion this year. The gain will result from the livestock segment of the industry, with beef the top export.
The state’s chicken sector took a hit in recent years from avian influenza, which caused farmers to cull entire flocks. Numbers of laying hens dropped by half from 2021 to 2022 but those flocks are steadily grown back. Egg producers will be forced to convert their operations to cage-free by 2025, a cost factor that will be somewhat made up by higher prices that can be charged for cage-free eggs. For the consumer, larger volumes of cage-free eggs will likely decrease the price point at the grocery store, although not to the level charged for eggs produced by caged birds.
Small grain farmers benefited this past year from abundant spring rains and harvested a crop twice as large as the year prior. Crop prices remained relatively high because of the war in Ukraine.
Corn farmers also benefited from soil moisture with the 2023 crop up 16% from the prior year, according to the Leeds School. However, robust crop yields nationwide resulted in a downturn in per bushel prices.
