rural economy

Farmland in Nebraska is worth 3 percent more than it was a year ago, an average of $2,730 an acre, said an annual report by the University of Nebraska on Wednesday. It was the first increase in agricultural land values in the state since they peaked in 2014.

U.S. milk production is projected to top 220 billion pounds this year as a long-running structural shift puts production in the hands of fewer, but larger, dairies. At the same time, the USDA said there were 34,187 dairy herds licensed to sell milk in 2019, a drop of 9 percent from the previous year.

The USDA estimates there were 2.023 million farms in the nation in 2019, a tiny decline of 5,800 farms from the previous year. The change is more dramatic when the time frame is widened — there are 3 percent fewer farms now than there were in 2014, and the amount of farmland fell 1.3 percent during that five-year period.

In what it described as its biggest step yet to close the digital divide, the Federal Communications Commission voted on Thursday to establish a “rural digital opportunity fund” to provide up to $20 billion over 10 years for high-speed internet networks in rural America.

Agricultural lending declined during the second half of 2019, and while that reflected lower production costs, it “likely also was due to an increase in revenue from government payments (Market Facilitation Program) connected to trade disputes that lingered through the year,” said the Federal Reserve on Thursday.

Despite the dour mood in the agricultural sector, prices for good-quality farmland held steady in 2019, partly because less land than usual was on the market, said Farmers National Co., a farm management and real estate company.

The Trump administration has sent $10.5 billion in cash to producers since mid-August to mitigate the impact of the Sino-U.S. trade war, aid that comes on top of $8.6 billion paid for 2018 crops and livestock. “Yes, [the payments] are helpful,” said a Kansas banker on Wednesday — and the government should keep writing the checks.

Between a weather-delayed harvest and uncertainties about the demand for their crops, farmers have been slow to sell corn and soybeans this fall. One consequence is tighter margins and revenue pressures on country elevators, said a report from ag lender CoBank.

Low commodity prices and high costs are tightening the credit squeeze on the farm sector, with little expectation of improvement in the near term, according to ag bankers in the Midwest and Plains. Some farmers and ranchers will liquidate assets during the winter to stay afloat, and some highly leveraged operators will be forced out of business, they said.

A comparatively small portion of the U.S. population, roughly 60 million of the nearly 330 million residents, lives in rural America. But that portion is spread across 97 percent of the nation's land. A new report from the American Communities Project at George Washington University says the immense diversity of rural America defeats the usual approach of a "one size fits all" policy for rural economic growth, even with adjustments for geographic regions or economic sectors.

Agricultural bankers are lending a markedly larger amount of money to farmers and ranchers, with loan volume up 11 percent from April, May, and June of last year, said the Federal Reserve on Thursday. It was the highest rate of growth in loan volume in the spring quarter since 2011.

The Obama administration’s increase in food stamp benefits during the Great Recession “had a positive average impact on county-level employment” in rural areas, says a USDA report.

On Thursday, hours before the second-largest U.S. farm group said producers “are in desperate need of a lifeboat to keep them afloat,” the House Agriculture chairman said that fiscal constraints would preclude Congress from a multibillion-dollar bailout for farmers.

Farm income weakened in much of the Midwest and Plains during the opening months of this year, said reports from regional Federal Reserve banks on Thursday, with ag bankers telling the St. Louis Fed that an adverse trade outcome is clearly the most significant threat to agriculture in 2019. On Friday, the Trump administration increased the tariffs on $200 billion worth of Chinese goods.

Fundamental change in U.S. agricultural and rural policy is "an absolute necessity," said Vermont Sen. Bernie Sanders on Sunday in calling for Teddy "Roosevelt-style trust-busting laws to stop monopolization of markets and break up massive agribusinesses." In a position paper, Sanders, pursuing the Democratic nomination for president, endorsed supply management — federal control over farm production — higher minimum prices for major commodities such as grain and milk and a return to a government-owned grain reserve "to alleviate the need for government subsidies and ensure we have a food supply in case of extreme weather events."

The continued decline in season-average corn and soybean prices since the peaks of 2022 will pinch farmer returns from the crops for the second year in a row, said three analysts writing at the farmdoc daily blog. They estimated that operator and land returns would fall below $300 an acre, levels last seen from 2014 to 2019.