Wheat prices are expected to hold well into next year, and farmland values are expected to stay strong.

Beef cattle prices likely will remain strong as well, but producers must manage production costs, especially feed, closely.

Farmers and ranchers also will face more rules and regulations as the pace for regulatory change continues to increase for farms and small businesses.

That’s the gist of an economic outlook presented by a quartet of Oklahoma State University Extension economists recently at the third annual Rural Economic Outlook Conference in Stillwater.

Derrel Peel, Breedlove Professor of Agribusiness and livestock marketing specialist, said drought continues to weigh heavily on the beef industry with continued herd liquidation, record high grain, forage and replacement cattle prices.

Producers are experiencing reduced cow-calf profitability, and feedlot and packer margins have been poor. Herd liquidation also has resulted in higher wholesale beef prices, more limited beef demand and weaker beef exports.

That’s a recap, he said for 2012.

For 2013, the industry wonders if drought will persist, accompanied by even more liquidation. Or will more normal weather mean higher heifer retention? He anticipates tighter cattle supplies into 2014. “Beef demand is the key unknown and is tied to the general economy.”