commodity prices
Three USDA reports this week will frame the ag sector outlook
In back-to-back-to-back reports, USDA economists will paint a numerical picture of the U.S. farm sector this week, with estimates of farm income, ag exports, and the output, demand and prices for 2018 crops. Most likely, they will add up to large crops, comparatively low grain prices and constrained income heading into the fifth year since the collapse of the commodity boom.
Minnesota doubles down on soybean biofuel
Minnesota ruled that biofuels will need to contain a mix of 20 percent soybeans or other renewable fuel sources, cutting the amount of emissions while boosting demand for soybeans, said MPR News. "This is an opportunity to add value to farmers' products," state agriculture commissioner Dave Frederickson said last Thursday, according to the report. "Given the fact that the first B10 mandate actually added about 63 cents per bushel, on every bushel sold, we're hoping to double that as we move into a B20 mandate."
On the horizon: Huge corn and soy crops, low market prices
The U.S. corn and soybean crops will be slightly larger than expected, mammoth production that would assure lackluster commodity prices far into 2018, according to a USDA survey of growers. With normal weather and yields, the corn and soybean harvests would be the second-largest on record and would be piled on top of stockpiles that have been growing since the 2012 drought.
The Black Sea region gains stature, the U.S. loses commodity market share
Since the start of this century, the U.S. share of the world market in wheat, corn and soybeans has declined, with South America seen as the leading rival. In reality, “the Black Sea is the only area with a larger share of world production in 2014-16 than in 2000-02 for all three crops,” says economist Carl Zulauf of Ohio State University.
U.S. wheat output to plunge 21 percent; price rises for first time in four years
Along with corn and soybeans, U.S. wheat prices reached a record high in 2013, just before the collapse of the commodity boom. The USDA projects that this year's wheat crop will end the four-year decline in prices, partly because the harvest will be nearly one-half billion bushels smaller than a year ago.
Perdue assures farmers, ‘You grow it and we’ll sell it’
Standing in shirtsleeves on a hay rack at an Iowa farm, Agriculture Secretary discarded his prepared speech in favor of repeated promises to be an unstinting advocate of U.S. food and ag exports, which generate 20 percent of farm income. President Trump supports biofuels, said Perdue, adding, "I think it was the boss who said we're not going to mess with the RFS (Renewable Fuels Standard)."
U.S. land retirement rises and falls with commodity prices
Congress has adjusted the enrollment cap on the Conservation Reserve, which pays landowners an annual rent to idle fragile land, in every farm bill since the program was created in 1985. With commodity prices in a trough, there are calls for a sizable increase in the reserve, a step that could affect wheat production far more than corn or soybeans according to a back-of-the-envelope estimate.
For third month, world food prices decline in FAO index
The FAO Food Price Index dropped by 1.8 percent in April, pulled down by lower sugar, cereal, dairy, and vegetable oil prices. Those drops were offset in part by higher meat prices.
World’s largest ag exporter feels hemmed in by competition
For decades, the United States has been the world's largest agricultural exporter, but the title is becoming harder to maintain, says the Wall Street Journal. "America's share of global corn, soybean and wheat exports has shrunk by more than half since the mid-1970s," it says, pointing to USDA data, adding that soybeans "make up about 40 percent of world exports, down from more than 70 percent three decades ago."
Cotton was ‘not completely left out’ of 2014 farm law
At a House Agriculture subcommittee hearing early this month, the National Cotton Council, an industry trade group, said growers are “vulnerable to further instability” due to low cotton prices.
U.S. farmers chase soybean profits, keep land in production
Instead of idling some land because of low commodity prices, farmers are plunging into soybeans, which have taking an ever-larger share of U.S. farmland. In a USDA survey, growers said they will plant a record 88.5 million acres of soybeans this spring, 7 percent more than a year ago because they offer a better chance of a profit than corn or wheat.
Value of Nebraska farmland down 15 percent in three years
The University of Nebraska's annual Farm Real Estate Survey says the average value of farmland in the state fell by 10 percent in the past year, to $2,805 an acre. It was the third year of declines since land peaked at an average $3,315 an acre, an overall drop of 15 percent.
FAPRI forecasts stability in farm income while land values slip
After suffering a 31-percent drop in net cash income in three years, the U.S. farm sector will see stable to modestly rising income in coming years, while farmland values will fall 11 percent before leveling off at the end of this decade, says the Food and Agricultural Policy Research Institute. The University of Missouri think tank says farm debt will rise, as will indicators of financial stress, such as the debt-to-asset ratio.
House Ag panel quietly asks for more farm bill money
The leaders of the House Agriculture Committee said aloud, albeit softly, what they have hinted for weeks — they want more money for the 2018 farm bill than is being spent under current law. Chairman Michael Conaway phrased the request to the Budget Committee as a need for "budget flexibility" for the farm bill while the committee's senior Democrat, Collin Peterson, said "we may need a little more."
Branstad covers for Perdue, as USDA makes first crop projections of the year
Traders believe U.S. farmers are stampeding into soybeans this year and are looking for confirmation at USDA's two-day Agricultural Outlook Forum, which opens this morning with speeches by President Trump's nominee for U.S. ambassador to China and the House Agriculture chairman, Michael Conaway of Texas. This is the first time since 1995 that the secretary of agriculture will not speak at the forum.
Big drop in U.S. wheat crop driven by smallest plantings since 1919
U.S. farmers will plant the smallest amount of land to wheat, 46 million acres, since record keeping began in 1919, the USDA projected at its annual Outlook Forum. Wheat has lost ground to corn and soybeans, which offer higher yields per acre and more potential for profit, for more than three decades.
Farm numbers dip slightly while income plunges
Three years after the collapse of commodity prices, there are only slightly fewer farms in the United States than when the seven-year boom peaked and farm income was record high, according to USDA data. The government estimated there were 2.06 million farms in 2016, down 2 percent from 2013, the same period in which net farm income, a gauge of solvency, plummeted 46 percent.
World cotton output to rise by 2 percent, U.S. by 7 percent — Forecast
In its first estimate of the new growing season, the International Cotton Advisory Committee forecast a world crop of 23.4 million tons, up 2 percent from 2016/17 due to larger plantings around the world. The intergovernmental group estimated U.S. cotton production would rise by 7 percent, a much larger increase than USDA's projection of a 2 percent upturn.
Farmers to get $10 billion in economic assistance
President Biden signed a stop-gap government funding bill over the weekend that calls for speedy payment of $10 billion to farmers to buffer lower commodity prices and high production costs. Congress voted to fund the government through March 14 after a fight that showed the limits of President-elect Trump's control over Republican lawmakers.