In a decade, government outlays to subsidize crop insurance increased 60 percent, expanding in step with the rapid growth in acreage covered by the policies, according to Risk Management Agency data released Sunday.
The new farm bill could cost nearly $130 billion a year — the highest price tag ever — with public nutrition programs getting more than $4 of every $5, wrote associate professor Roman Keeney in Purdue’s annual agricultural economics review. “The overall budget, and particularly spending on the nutrition title (primarily food assistance for low-income households), should continue to be the most politically divisive component of the farm bill debate.”
The Farm Bureau Federation and John Deere signed a memorandum of understanding on farmers' right to repair their equipment on Sunday — potentially a breakthrough after years of complaints that manufacturers prevented access to the increasingly computerized controls of tractors, combines and other equipment.
The highest interest rates in years will complicate farm finances, and operators should expect higher rates to persist for several years as part of efforts to quash inflation, said a team of agricultural economists on Wednesday. Farmers will pay more when they borrow money, face higher break-even levels on investments, and feel downward pressure on the value of farmland, their largest asset.
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.
Strong harvest-time commodity prices pushed farmer confidence to its highest level in 16 months, said a Purdue University poll of large operators released on Tuesday. The abrupt 24-point climb in the Ag Economy Barometer "was motivated by producers' stronger perception of current financial conditions on their farms," said agricultural economists James Mintert and Michael Langemeier.
n discussions to avert a potential shutoff of U.S. corn exports to Mexico, a senior-level Mexican delegation told U.S. officials that they wanted to ensure self-sufficiency in corn for tortillas. U.S. officials said Mexico "presented some potential amendments" to its presidential decree against imports of genetically modified corn beginning in January 2024.
High commodity prices and low interest rates helped drive farmland values in Iowa to an average of $11,411 an acre, up 17 percent from 2021, when they rose 29 percent, said Iowa State University’s annual Land Value Survey.
Higher input costs are by far the No. 1 concern among farmers, but only a minority of them have altered their operations because of rising energy prices, according to a Purdue University poll of large-scale operators.
High commodity prices, due in part to warfare in Ukraine, will propel U.S. net farm income to a record $160.5 billion this year, despite a steep climb in expenses, said the Agriculture Department on Thursday. Farm income, a gauge of profitability, would be 14 percent higher than last year.
Congress is on the cusp of overhauling the farm program but the top question among farmers about government action is interest rate policy, which lies outside the jurisdiction of the Senate and House Agriculture committees, said a Purdue University poll on Tuesday. Concern about interest rates coincided with the Federal Reserve campaign to squelch inflation through regular increases in interest rates.
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.”
The USDA said Thursday it expects farm income for 2022 to rise 5.2 percent, to $147.7 billion, from a year earlier, with cash receipts for agricultural commodities at a record level. But higher production expenses and lower government Covid-19 payments are presenting some headwinds.
Farmers faced higher expenses and earned less money from their crops and livestock than initially expected in 2020, due to market disruptions caused by the pandemic, said a USDA Covid-19 working paper. By many standards, such as debt-to-asset ratio, the financial strength of the sector softened in 2020, despite $45.7 billion in federal subsidies — the largest ever — said USDA economists.
Last spring, the Biden administration encouraged U.S. farmers to grow more wheat in response to Russia’s invasion of Ukraine and said it would make crop insurance more widely available for growers who wanted to team winter wheat with soybeans. Now there’s another inducement: Double-crop wheat and soybeans would be more profitable in 2023 than standalone corn or soybeans, say university economists.
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.
Persistently strong commodity prices in the opening months of the year fueled a sharp growth in farmland values throughout the Midwest and Plains, said a Federal Reserve report on Thursday.
Fueled by strong farm income and low interest rates, farmland values soared more than 20 percent in the central Plains during 2021, according to a quarterly survey of ag bankers by the Kansas City Federal Reserve Bank. A majority of the lenders said they expected values to increase this year, but an equally large number "also indicated that farmland values were currently over-valued, suggesting there may still be future risks of declines," said the regional Fed.
After reaching an eight-year high thanks to massive pandemic payments in 2021, net farm income — USDA's gauge of profitability — is expected to fall precipitously this year. The USDA will make its first forecast of farm income on Friday.