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.
The largest U.S. farmers and ranchers say the Russian invasion of Ukraine, with its disruption of grain, oil and fertilizer shipping, will drive up their costs of production, according to a Purdue University poll released on Tuesday. The Ag Economy Barometer also showed big operators are tempering somewhat their expectations of soaring input prices.
Farmers and ranchers would be eligible for $10 billion in disaster relief for losses in 2020 and this year under the short-term government funding bill passed by Congress on Thursday. The bill also extended the life of a livestock price-reporting bill until Dec. 3, giving lawmakers time to agree on a multiyear reauthorization.
After reaching its highest level since 2013, U.S. net farm income would tumble by one-fifth next year, despite continued high crop and livestock revenue, said the Food and Agricultural Policy Research Institute on Tuesday. "Under current policies, farm income could drop again in 2022, as government payments decline and production expenses continue to rise," the think tank said.
Farmers in the Midwest and Plains are reaping a cash bonanza that has dramatically improved their finances a year after the pandemic pummeled commodity markets and prompted a record $46 billion in federal payments to agriculture, said three regional Federal Reserve banks on Thursday. (No paywall)
Cattle, hog, and broiler chicken producers should expect lower market prices during the first half of 2018 than they saw during the first six months of this year, said USDA economists.
For the third time this year, the Agriculture Department is holding up a regulation that would give livestock on organic farms more elbow room than is common at conventional operations, and this time, it says, it may rewrite the rule, which already is a decade in the making. "We will see the department in court and are confident that we will prevail on this important issue for the organic sector," said the Organic Trade Association, which sued USDA two months ago for unlawful delay of the animal welfare regulation.
Mexico is the third-largest market for U.S. farm exports, so the declining value of the peso "could create a drag on U.S. animal product exports in 2017," says USDA's monthly Livestock, Dairy and Poultry Outlook. The southern neighbor of the United States is the largest market for exports of U.S. pork, poultry, and dairy products, says USDA, as well as the No. 3 market for U.S. beef.
The collapse in crop and livestock prices since 2013 will result in the lowest net farm income since 2009, says USDA. In the final estimate of the year, the Economic Research Service pegged farm income at $66.9 billion, down $4.5 billion from its August estimate and barely more than half of the record income that producers enjoyed just three years ago.
President-elect Donald Trump is getting a welcoming handshake from farm groups often identified with Democrats or populists, not just those touting free enterprise and low taxes. The National Farmers Union said in a letter to Trump that the Trans-Pacific Partnership trade pact, backed by many farm groups, is a threat to the rural economy, so "we hope to work with your administration on fair trade deals."
After a review of farm-sector financial indicators, economist Brent Gloy says, "Caution going forward would be appropriate," particularly for operators who are borrowing money. The commonly used debt-to-asset ratio is low, Gloy writes at the Agricultural Economic Insights blog a day before USDA updates its farm-income forecast, but lesser-known yardsticks, such as the debt-service ratio and times-interest-earned ratio "indicate that financial conditions are as poor as any seen for some time."
The world nearly met its goal of halving hunger by 2015, but will miss its ambitious new goal of eradicating hunger by 2030 without decisive action to raise incomes, expand food production and alleviate income inequality, says a joint report of the OECD and FAO. The new edition of their Agricultural Outlook says the number of undernourished people in the world will drop to 636 million in 2025, compared to 799 million now.
The newly created Ag Economy Barometer will provide a monthly gauge of the sentiment of large-scale farmers, who produce the bulk of U.S. food and fiber, say its sponsors, the Center for Commercial Agriculture at Purdue U and CME Group, which operates futures markets. Some 400 large producers …
Spurred by record-high cattle prices in 2014 and early 2015, U.S. ranchers are expanding their herds with plans to send more cattle to slaughter in coming months. The USDA says the number of calves is up 3 percent from a year ago and the number of beef cows is up 4 percent.
Weak crop and livestock prices combined to pull down U.S. net cash farm income -- a measure of farmers' ability to pay bills and make payments on debt -- 28 percent in 2015, the second year of falling income.
President Obama signed into law five-year extensions of the export-grain inspection program and a program that requires meatpackers to report the purchase price of cattle, hogs and sheep.
In less than four minutes, the House debated and passed bills to reauthorize for five years the export grain inspection program and require meatpackers to report the purchase price of cattle, hogs and sheep. Statutory authority for both expires on Wednesday. The Senate approved the reauthorizations last week in a single bill, so now that bill goes to the White House.
In less than half an hour, the House passed on voice votes bills to reauthorize the Grain Standards Act and the mandatory livestock price reporting program, each with significant modifications to prevent disruption of service. The bills now go to the Senate. The Grain Standards bill would require the USDA to step in immediately if there is an interruption of inspection of grain at export terminals, either by dispatching federal inspectors or inspectors from state agencies empowered to conduct the work.