Agricultural Economy

Flooding and gloomy price prospects for corn and soybeans are diminishing optimism in the Corn Belt as spring planting nears.  Recent news articles continue to discuss the ongoing negative impacts of Midwestern floods on an already battered farm economy.  Meanwhile, corn and soybean prices fell on Friday after the U.S. Department of Agriculture released data relating to prospective planting intentions and grain stocks.

A Reuters news article this week stated that, “Frustration is building across farm country at what feels like a never-ending season of bad news.”  And an update from the Federal Reserve Bank of Minneapolis recently noted that, “Farmers are dealing with a host of compounding problems.”  As spring planting in the Corn Belt approaches, today’s update looks at recent news items that shed light on the condition of the agricultural economy.

Today’s update looks briefly at how relatively steady farmland values are impacting farm financial variables, and then discusses recent developments relating to farmland values in Illinois, Iowa and Nebraska.

On Wednesday, the U.S. Department of Agriculture released its 10-year projections for the food and agricultural sector.  The report noted that, “Over the next several years, the agricultural sector will continue to adjust to the ongoing China-U.S. trade dispute (which is assumed to last the duration of the projection period). This results in an expected shift away from soybean production in the U.S. due to lower prices and towards corn and wheat which are expected to generate relatively higher returns.”  Today’s update highlights aspects of the report that focused on corn and soybeans. 

On Wednesday, the Federal Reserve Board released its February 2019 Beige Book update, a summary of commentary on current economic conditions by Federal Reserve District. The report included several observations pertaining to the U.S. agricultural economy.

The USDA’s Economic Research Service (ERS) indicated on Wednesday that, “Net farm income, a broad measure of profits, is forecast to increase $6.3 billion (10.0 percent) from 2018 to $69.4 billion in 2019, after decreasing $12.0 billion (16.0 percent) in 2018. Net cash farm income is forecast to increase $4.3 billion (4.7 percent) to $95.7 billion.”

Following Wednesday’s appearance before the House Agriculture Committee, Secretary of Agriculture Sonny Perdue testified on Thursday before the Senate Agriculture Committee at a hearing titled, “Implementing the Agriculture Improvement Act of 2018.”  A variety of topics were discussed at the meeting, today’s update highlights some of these issues including: Trade, and Farm Bill payment limits.

Speaking on Thursday at USDA’s Agricultural Outlook Forum in Arlington, Virginia, USDA Chief Economist Robert C. Johansson provided a broad outlook for U.S. agriculture.  Today’s update provides an overview of key aspects of Dr. Johansson’s presentation.

Last week, the Federal Reserve Banks of Chicago, St. Louis, Kansas City, and Minneapolis released updates regarding farm income, farmland values and agricultural credit conditions from the fourth quarter of 2018. Today’s update highlights core findings from the Fed reports.

On Thursday, the U.S. Department of Agriculture released the complete set of tables prepared for the upcoming USDA Agricultural Projections to 2028 report, which is scheduled to be released on March 13th.  Recall that in November, the Department released tables containing long-term supply, use, and price projections to 2028 for major U.S. crops.  The new tables included projections for farm income and global commodity trade, which are highlighted below.

Earlier this week, the U.S. Department of Agriculture’s Economic Research Service (ERS) published a report that looked at trends in the development of drought-tolerant corn in the United States.  Today’s update looks at some key points from the ERS report.

The U.S. Department of Agriculture’s Economic Research Service (ERS) recently released its annual brochure exploring characteristics of America’s farms.  Today’s update highlights a few of the key findings from the ERS brochure.

CoBank recently released a report that explored a variety of issues that will impact the U.S. agricultural economy in 2019.  Meanwhile, recent news items have discussed issues associated with farm lending and farm income.  Today’s update briefly highlights core points from the CoBank report, and also looks at the recent news items discussing important elements of the agricultural economy.

Recent updates from Purdue University, the University of Illinois, and Iowa State University provide a snapshot of variables impacting the U.S. agricultural economy in 2019.  Today’s update looks briefly at key points from each of these three land grant university reports.

Nathan Kauffman and Ty Kreitman indicated in a recent update from the Federal Reserve Bank of Kansas City (“As Rates Tick Up, Growth in Operating Loans Boosts Farm Lending”) that, “Rounding out a year characterized by lower farm incomes, uncertainties about agricultural trade and the growth of lending volumes, interest rates on agricultural loans trended higher. The mounting combination of higher leverage and rising rates could put additional pressure on some farm operations.” Today’s update looks at the Kansas City Fed update in more detail with a particular focus on agricultural lending variables and farmland values.

On Wednesday, the Federal Reserve Board released its January 2019 Beige Book update, a summary of commentary on current economic conditions by Federal Reserve District. The report included several observations pertaining to the U.S. agricultural economy.

An update this week from the Federal Reserve Bank of Dallas, as well as a short paper last month from the Federal Reserve Bank of Minneapolis, provide insight into portions of the U.S. agricultural economy.   

A news release Wednesday from the Center for Agricultural and Rural Development at Iowa State University and Iowa State University Extension and Outreach indicated that, “After a reprieve in 2017, commodity prices, interest rates, and trade disruptions drove Iowa farmland values down for the fourth time in five years. The average statewide value of an acre of farmland is now estimated to be $7,264. This represents a decrease of 0.8 percent, or $62 per acre, from the 2017 estimate.”

On Wednesday, the Federal Reserve Board released its December 2018 Beige Book update, a summary of commentary on current economic conditions by Federal Reserve District. The report included several observations pertaining to the U.S. agricultural economy.