Agricultural Economy

The USDA’s Economic Research Service (ERS) indicated on Friday that, “Net farm income, a broad measure of profits, is forecast to decrease $9.1 billion (12.1 percent) from 2017 to $66.3 billion in 2018, after increasing $13.8 billion (22.5 percent) in 2017. Net cash farm income is forecast to decrease $8.5 billion (8.4 percent) to $93.4 billion.”

In addition to the melancholy agricultural outlook contained in recent Federal Reserve District agricultural surveys, an update last week from the Federal Reserve Bank of Minneapolis pointed to troubling data regarding Chapter 12 Bankruptcies in the District.  In addition, recent news articles have also discussed some variables that could impact the state of the U.S. agricultural economy as the 2018 harvest draws to an end.

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 third quarter of 2018. Today’s update highlights core findings from Thursday’s reports.

On Friday, the USDA’s Office of the Chief Economist (OCE) released selected tables prepared for the Department’s upcoming Agricultural Baseline Projections report.  In part, the tables demonstrated that, “USDA estimated 82.5 million acres of soybean plantings for the spring of 2019, down from 89.1 million acres this year.”

On Monday, the USDA’s Economic Research Service (ERS) released a report titled, “An Exploration of Crop Markets: A Deeper Look Into the USDA Crop Baseline Projections,” which discussed the February 2018 USDA long-term crop projections in greater detail.  Today’s update highlights aspects of the report relating specifically to corn and soybeans.

On Wednesday, the Federal Reserve Board released its October 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.

Nathan Kauffman and Ty Kreitman indicated in a recent update from the Federal Reserve Bank of Kansas City (“Large-Scale Financing Drives Ag Lending Activity Higher”) that, “Alongside persistently low agricultural commodity prices, bankers throughout the country expected farm income to decline in the coming months. Despite the ongoing weaknesses in farm income and agricultural credit conditions, however, delinquency rates on farm loans remained low and the performance of agricultural banks remained sound.”

Suzanne Jenkins, a senior policy analyst at the Federal Reserve Bank of St. Louis, and Nathan Kauffman, vice president at the Federal Reserve Bank of Kansas City, indicated in a recent update (“A Tale of Two Economies: Farmers Struggle despite Strong U.S. Economy”) at the Regional Economist that, “At a time when the overall U.S. economy continues to boom, the U.S. agricultural sector has continued to struggle amid falling farm income and deteriorating agricultural credit conditions.”

On Wednesday, the USDA’s Economic Research Service (ERS) released a report titled, “Tillage Intensity and Conservation Cropping in the United States,” which discussed regional and crop conservation tillage practices, as well as adoption of residue and cover practices.  Today’s update highlights a few aspects of the report.

On Tuesday, the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri released its Baseline Update for U.S. Farm Income and the Farm Balance Sheet.  Today’s update includes brief highlights from the baseline update.

Today’s update looks at a variety of information sources that highlight recent developments relating to farmland values, with particular focus on Illinois, Iowa and the States in the Minneapolis Federal Reserve District.

On Wednesday, the Federal Reserve Board released its August 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.

The Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri recently released its latest baseline update for U.S. agricultural markets.  Today’s post summarizes highlights from the August FAPRI baseline report.

The U.S. Department of Agriculture’s Economic Research Service (ERS) indicated on Thursday that, “Net farm income, a broad measure of profits, is forecast to decrease $9.8 billion (13.0 percent) from 2017 to $65.7 billion in 2018, after increasing $13.9 billion (22.5 percent) in 2017. Net cash farm income is forecast to decrease $12.4 billion (12.0 percent) to $91.5 billion.”

Reuters writer Gus Trompiz reported on Wednesday that, “European farmers are counting the cost of a summer heatwave that has shrunk cereal harvests and shriveled pastures, leaving some farms struggling to survive and shutting the EU out of lucrative export markets.”

In its August Grain: World Markets and Trade report on Friday, USDA’s Foreign Agricultural Service (FAS) stated that, “Combined wheat production in the European Union, Russia, and Ukraine is forecast down 12 percent from last year to the lowest level in 5 years. The EU wheat crop is down 9 percent from last year on hot, dry weather in the northern Member States, while production in Russia and Ukraine is down from recent bumper crops on a return to normal yields.”

On Thursday, the Federal Reserve Banks of Chicago, St. Louis and Kansas City released updates regarding farm income, farmland values and agricultural credit conditions from the second quarter of 2018.  Recall that the Federal Reserve Bank of Dallas issued a similar update last month.  Today’s update highlights core findings from Thursday’s reports.

Last week, Financial Times writer Emiko Terazono reported that, “The wheat market is feeling the heat, with key global producers sweating over a drought that has curbed output. After several years of bumper harvests, the wheat market is poised to tighten sharply as Russia, Australia and EU countries contend with scorching temperatures.”