For the first time since 2015, Midwestern farmers face negative returns from corn and soybeans grown on rented land, three agricultural economists said Tuesday at the farmdoc daily blog. They estimated a loss of $99 an acre for corn and $13 a bushel on soybeans, based on rising production costs and a downturn in market prices.
Americans agree that federal aid to farmers during a disaster is important. They are less likely to support federal assistance to help producers adopt sustainable farming practices, according to the quarterly Gardiner Food and Agricultural Policy Survey.
Crop-insurance claims by farmers for prevented planting are up by 48 percent this year, said Bloomberg, a reflection of the cold and rainy spring. Growers filed claims on 2.3 million acres of corn and nearly 2.2 million acres of soybeans, said the news agency, based on its review of federal data.
The fall harvest will not begin for weeks but the USDA already forecasts a modest increase in costs of production for the major field crops in 2016, up 1 to 2 percent an acre compared to this year.
The federally subsidized crop-insurance program grew dramatically over the past two decades. It covers 44 percent more acres and, with creation of revenue insurance, the average level of coverage climbed to 75 percent in 2014, a 17-point increase from 1996, according to economists Carl Zulauf of Ohio State and Dan Orden of Virginia Tech.
A farmer with 1,500 acres of highly productive land in central Illinois could see net income this year that is a fraction of last year - around $7,500 versus more than $103,000 in 2014, says U-Illinois economist Gary Schnitkey.
When Congress first experimented with a revenue-support program for farmers, there were few takers. Only 8 percent of "base" acres were enrolled in the so-called ACRE program in 2013.
Corn and soybeans are the two most widely grown crops in the nation, forecast at 174 million acres this year, or slightly more than half of the land devoted to the two dozen "principal" crops of the United States.
After the fall-off from record-high corn, soybean and wheat prices in 2012, Purdue economist Mike Boehlje says growers can expect to "bounce along close to break-even for five to 10 years," reports DTN.
Corn and soybean growers will need to trim their cash flow again in 2016 if commodity prices repeat this year's comparatively low levels, says economist Gary Schnitkey of U-Illinois.
Growers may be prevented by bad weather from planting 1.1 million acres of their intended record 84.6 million acres of soybeans, says economist John Newton of U-Illinois.
"The demand for corn for ethanol production appears to be on solid footing for the next 18 months," says economist Darrel Good of U-Illinois. "While growth may be limited, a setback is not expected."
Stockpiles of U.S. corn and soybeans are smaller than expected, giving a boost to futures prices in the near term, although massive harvests of the two most widely planted crops in the nation are on the horizon.
Farmers harvested 7.4 million acres of winter wheat in the past week, 19 percent of the total crop. The harvest is now 38 percent complete, according to the weekly Crop Progress report.
"Much has been made of a potential supply disruption impacting the availability of turkeys during the Thanksgiving holiday," say economists John Newton and Todd Kuethe of U-Illinois, who rebut the idea at farmdoc daily. They say the monthly Cold Storage report shows turkey stockpiles are 5-percent larger than a year ago and other USDA reports show turkey production from January-April was up by 7 percent from the same point in 2014.
The impact of the worst epidemic of avian influenza ever to hit U.S. poultry flocks has reached the ethanol industry in the form of smaller sales of distillers dried grains (DDGs), a widely used feed, says DTN.
More than 1 billion bushels of U.S. soybeans are likely to be shipped to China during the current marketing year, say economists John Newton and Todd Keuthe of U-Illinois, who ask, "Are all our beans in one basket?"
Hog farmers are expanding their herds following the record-high market prices of 2014. Production is forecast to rise by 7 percent this year, a surge that is driving down hog prices.
The long run of market prices that began in 2006 lured farmers to expand plantings of corn and soybeans by 20 million acres. Most of the increase came from the Plains states and the South, say economists John Newton and Todd Keuthe of U-Illinois.