Bloomberg’s Gerson Freitas Jr reported that last week, “soybeans capped an eighth straight week of losses, the longest stretch of declines since 2006, on an outlook for record global stockpiles and sluggish appetite for US exports.” “The losing streak underscores how soybean traders have lacked any incentive to buy futures of the commodity used in […]
Agricultural Economy
Farm Income Forecast to Fall in 2024
The United States Department of Agriculture Economic Research Service reported Wednesday that “net farm income, a broad measure of profits, is forecast at $116.1 billion in calendar year 2024, a decrease of $39.8 billion (25.5 percent) relative to 2023 in nominal (not adjusted for inflation) dollars.” “After adjusting for inflation, net farm income is forecast […]
Mexico Buying US Corn Despite Dispute
Reuters’ Karen Braun reported last week that “the United States has been losing corn export business to Brazil as the South American country continues expanding its output, though top customer Mexico has secured a record volume of U.S. corn for shipment this year.” “That is despite an active dispute between the United States and Mexico […]
Fed Rates Unchanged in January
CNBC’s Jeff Cox reported that “the Federal Reserve on Wednesday sent a tepid signal that it is done raising interest rates but made it clear that it is not ready to start cutting, with a March move lower increasingly unlikely.” “Policy makers have kept their benchmark interest rate between 5.25% and 5.5% — the highest […]
ADM Investigating Accounting Practices
Reuters writer Karl Plume reported on Monday that “An investigation into accounting practices in Archer-Daniels-Midland’s Nutrition segment could not come at a worse time for the company as sinking crop prices look set to erode profit for its core grain trading and processing businesses this year.” ADM had been counting on its Nutrition unit to return […]
Fed’s January Ag Economy Observations
The Federal Reserve Board on Wednesday released its January 2024 Beige Book update, a summary of commentary on current economic conditions by Federal Reserve District. While the report covers generalized “regional economic conditions and prospects,” it also includes the following observations pertaining to the U.S. agricultural economy. Sixth District — Atlanta “Low cattle supply led […]
High Interest Costs Could Weigh On Farmland Demand
The Federal Reserve Bank of Kansas City’s Ty Kreitman reported yesterday that “higher interest rates and a moderation in agricultural commodity prices have cut potential returns and could dampen demand for farmland—and thus farmland values—going forward.” The potential for lower farmland demand is largely driven by the fact that, “In 2023, interest costs on new […]
Argentina’s Rosario Exchange increases soybean and corn production estimates
Bloomberg reporter Jonathan Gilbert reported yesterday that “Argentina is on course to produce its best soybean crop in five seasons — 52 million metric tons — as El Nino-fueled rains water fields that were parched by several years of drought.” “An Argentine soy harvest of 52 million tons would surpass last year’s miserly crop by 160%, impacting […]
Red Sea Attacks Continue, Could Affect U.S. Corn
Reuters reported yesterday that “U.S. and British naval forces shot down 21 drones and missiles fired by Yemen-based Houthis on Tuesday towards the southern Red Sea, the United States said, with Britain hinting at further measures to protect international shipping lanes.” The attack was the largest attack by the Houthis in the Red Sea since mid-November, […]
German Farmers Protest Ag Subsidy Cuts
CNBC writer Sophie Kiderlin reported at the beginning of this week that “Farmers across Germany on Monday began protests against the government’s economic and agricultural policies, blocking roads and highways with tractors and marching through major cities.” “Farmers are protesting the government’s plans to reduce or withdraw tax breaks for the agriculture sector, which were […]
California’s Proposition 12 Takes Full Effect
California’s Proposition 12 farm animal confinement law took full effect at the beginning of the year, a little more than 5 years after voters approved it as a ballot measure in the state. The law “bars sales in California of pork, veal and eggs from animals whose confinement failed to meet certain minimum space requirements,” […]
Corn futures fall more than 30% in 2023
Grain futures ended 2023 significantly in the red, according to recent Reuters reporting from Brendan O’Brien, with corn futures suffering their “biggest yearly drop in a decade while wheat and soybeans also posted steep annual declines after bumper harvests in Brazil and resilient Black Sea trade tempered concerns about weather and war.” The most active […]
FT: Low Corn Prices “Heap Pressure on Farmers”
Financial Times writer Susannah Savage reported yesterday that, “The price of corn has tumbled to a three-year low as supplies from the US and Brazil surge while demand stagnates, helping to cool food price inflation but heaping pressure on farmers who had been expecting high prices to last.”
2023 Farm Sector Income Forecast, November
“The USDA’s Economic Research Service (ERS) indicated on Thursday that, “Farm sector income is forecast to fall in 2023 after reaching record highs in 2022. Net farm income, a broad measure of profits, reached $182.8 billion in calendar year 2022, increasing $42.4 billion (30.2 percent) from 2021 in nominal dollars.”
NYT: “Carriers Want to Replace Jet Fuel with Ethanol to Fight Global Warming”- Water Use Concerns
New York Times writers Max Bearak, Dionne Searcey and Mira Rojanasakul reported yesterday that, “Vast stretches of America are dominated by corn, nearly 100 million acres of it, stretching from Ohio to the Dakotas. What once was forest or open prairie today produces the corn that feeds people, cattle and, when made into ethanol, cars.”
Fertilizer Prices Mixed, While Brazilian Soybean Production Estimates Adjusted
DTN writer Russ Quinn reported last week that, “Retail fertilizer prices saw mixed moves again during the second week of November 2023, according to sellers surveyed by DTN.”
Minneapolis Fed: Farm Incomes Down in Third Quarter, But Land Values Climb
In an article last week from the Federal Reserve Bank of Minneapolis, “Farm incomes fell going into harvest, but finances remained solid,” Joe Mahon pointed out that, “Farmers always have a lot riding on harvests. But heading into this year’s fall harvest, they were also contending with lower incomes, due to falling output prices and high production costs.”
Dry Weather in Brazil Threatens Crops, Compels Tough Decisions for Farmers
Bloomberg writers Clarice Couto, Tarso Veloso, and Michael Hirtzer reported late last week that, “Parched fields and scorching heat have delayed soybean planting in the world’s biggest grower, imperiling the upcoming corn crop that can’t even begin until soy has been reaped.”
Kansas City Fed: Farm Loan Interest Rates Climb, as Ag Real Estate Values “Held Firm”
Nate Kauffman and Ty Kreitman, writing in last week’s Ag Credit Survey from the Kansas City Fed, noted that, “Farm income and producer liquidity cooled in recent months alongside lower commodity prices.”
Kansas City Fed: U.S. Ag Economy Softened in Third Quarter; While Soybean Futures Climb “10% From a 22-Month Low in October”
Last week, in its Third Quarter 2023 Ag Bulletin, the Federal Reserve Bank of Kansas City indicated that, “The U.S. agricultural economy softened in the third quarter alongside a drop in commodity prices.”