Farm finances are strong, but rise in land values slows
High commodity prices supported "profit opportunities for many producers across the farm sector" ahead of the spring planting season, although there were concerns about operating expenses, higher interest rates and drought, said the Kansas City Federal Reserve Bank.
Cotton growers make room for more corn and wheat
Battered by drought and rising costs, U.S. cotton growers will devote more of their land to corn, wheat and soybeans — crops that promise higher revenue this year — while sharply reducing their cotton plantings, said a survey released on Sunday. The National Cotton Council said its survey of growers indicated 11.4 million acres will be planted to cotton this spring, 17 percent less than last year.
Growers to plant more wheat, pursuing war-boosted prices
With U.S. wheat selling for a record-high average of $9.10 a bushel, growers say they will sow the largest amount of land to wheat in seven years, enough to bump up production by 17 percent.
Play it again: High and volatile commodity prices in the year ahead
Economic growth and inflation will slow in the coming months, but commodity prices are likely to be volatile as the world’s farmers try to catch up with the global appetite for food, said two leading agricultural economists on Wednesday. “I think that 2023 still looks pretty strong” for U.S. farm income, said Nathan Kaufman, the Kansas City Federal Reserve Bank’s principal expert on agriculture economics.
World food prices down for ninth month in a row
The Russian invasion of Ukraine drove food prices to record levels during 2022 and the Food Price Index remains elevated after a nine-month decline, said the UN Food and Agriculture Organization.
Farmland values will stay strong in 2023, says ag real estate firm
High commodity prices will combine with strong demand to hold farmland values at near-record levels in 2023, said Farmers National Co., a farm real estate and management company, on Wednesday.
Farmland values gallop higher despite interest rate increases
Strong commodity prices are creating opportunities for U.S. farmers to profit despite the risks posed by drought and higher production costs, said the Ag Finance Update by the Kansas City Federal Reserve Bank. Farmland prices surged an average of 20 percent in the Farm Belt during the summer as buyers shrugged off sharply higher interest rates.
Low water on Mississippi hits grain prices at the farm gate
Farmers in the Midwest and the mid-South are paying the price for low water on the Mississippi River in the form of lower cash bids for their corn and soybeans — as much as $2 a bushel lower for soybeans, said USDA economists on Wednesday. At the same time, the cost of transporting fertilizer upriver has increased, and neither situation is likely to change before late winter.
A ‘pretty flat’ outlook for farm exports in 2023
After reaching a record high in 2022, U.S. farm exports will plateau amid a world of uncertainties, said the USDA chief economist on Tuesday. The strong dollar and slower economic growth worldwide will be a drag on exports, now forecast by USDA at $193.5 billion this fiscal year, down slightly from the estimated record of $196 billion in the fiscal year that ended on Sept. 30.
Fed report: Highest financing expenses since 2019 for farmers
Headwinds are intensifying for the farm sector, although high commodity prices support a positive outlook for farm finances through the end of this year, said a survey of ag bankers on Thursday. Alongside increased loan volume during the summer, “interest rates rose sharply and pushed financing expenses to the highest level since 2019.”
As war disrupts supply chains, U.S. wheat crop is smaller than expected
U.S. growers reaped their second-smallest wheat crop in 20 years due to drought in the Plains, said the Agriculture Department. The smaller-than-expected harvest would delay any American role in restoring grain flows disrupted by the Russian invasion of Ukraine.
Drought pares U.S. corn and soy harvest, say traders
With the fall harvest getting under way, traders expect the USDA to trim its estimate of the U.S. corn crop by more than a quarter-billion bushels on Monday but to stick to its forecast of the largest soybean crop ever, at roughly 4.5 billion bushels. Dry weather in the western Corn Belt, including powerhouses Iowa and Nebraska, will lower corn production to just below 14.1 billion bushels, or 1 billion bushels less than last year, according to the average estimate from traders surveyed by wire services.
Rising input costs cloud the sunny outlook for farm income
High commodity prices are the fueling a strong farm economy in the Midwest and Plains this summer, but agricultural lenders worry that higher prices for seeds, fertilizer, fuel and other inputs will put the brakes on farm income in the near term. "Lenders reported growing concerns about 2023," said the Kansas City Federal Reserve Bank, one of four regional Feds to survey bankers every three months about farm finances.
Food is a factor in inflation double whammy
Wholesale prices rocketed by a near-record 11.3 percent for the year ending in June, said the Labor Department on Thursday, a day after it reported that consumer prices had soared 9.1 percent during same period. Food was an inflationary factor in both reports, although some analysts saw signs that the momentum for higher prices was easing.
Grasslands enrollment in Conservation Reserve reaches 7 million acres
The Agriculture Department said it would enroll more than 3.1 million acres of grasslands — the largest amount ever — in the Conservation Reserve Program this fall, underlining the transformation of the reserve into a working lands program. The CRP was created in 1985 as a cropland retirement program.
Commodity prices soften, although still elevated
Steered by fears of recession and a clearer picture of this year’s global grain harvest, the sky-high commodity prices fueled by Russia’s invasion of Ukraine are losing momentum, analysts said on Thursday. The USDA was likely to scale back its estimates of record-high farm-gate prices for this year’s wheat and soybean crops despite the uncertainties caused by warfare in the Black Sea region.
Link between commodity prices and inflation is weak
There is little correlation between commodity prices and inflation rates, said a group of agricultural economists writing at the farmdoc daily blog. "Current high inflation rates do not necessarily signal a continuing period of high commodity prices," they said, pointing to "plateaus" when corn and soybeans cluster around long-term price averages.
Lawmakers mull margin protection, permanent disaster program for crops
Concerned by rising production costs and the longevity of sky-high commodity prices, farm-state lawmakers floated margin protection for crop growers and standby farm disaster programs on Thursday for inclusion in the 2023 farm bill. However, farm bill funding may be tight, which could limit Congress’ ability to add new features to the farm program.