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Understanding Agricultural Economic Trends and Challenges

Explore the current state of agricultural production and consumption, impact on farm incomes, debt trends, and financial stress. Learn about shifts in crop and livestock revenues affecting net farm income. Discover projected improvements and potential challenges ahead.

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Understanding Agricultural Economic Trends and Challenges

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  1. Ag Outlook June 7, 2017 Chad Hart Associate Professor/Crop Marketing Specialist chart@iastate.edu 515-294-9911

  2. Ag Productivity and Usage Using corn as an example Source: USDA

  3. Ag Prices Using corn as an example Source: USDA

  4. Net Farm Income Source: USDA

  5. Farm Debt Source: Federal Reserve

  6. Ag Economic Summary • Agricultural production and consumption has grown rapidly over the past several years. • But when production exceeds consumption, prices fall. • Crop revenues peaked in 2012-13, while livestock revenues crested in 2014-15, leading to record farm incomes. • Since then net farm income has been cut in half. • While the percentage loss in substantial, net farm income remains above levels from the early 2000’s. • Farmers and ranchers have partially compensated for the loss in income by taking on higher debt loads. • Farm and ranch balance sheets are eroding and financial stress is building for some producers, but the financial issues are not as severe as during the 1980’s. • If agricultural prices slowly improve (as projected), the squeeze on farm finances will improve as well. But for some producers, the squeeze may be too much.

  7. AVERAGE VALUES all farmland 1941−2016 $7,183 As of Nov. 16 -5.9%

  8. % Change in Nominal Iowa Farmland Values 1942-2016

  9. A replay of 1920s or 1980s farm crisis? Source: USDA-ERS, Ag DM C2-70, Zhang and Beek (2016) Farm Policy Journal

  10. President’s Budget Request Source: OMB, 2018 Budget

  11. USDA’s Budget Source: USDA 2017 Budget

  12. Proposed Adjustments in Farm Policy Source: OMB, 2018 Budget

  13. U.S. Corn Supply and Use Source: USDA-WAOB

  14. U.S. Soybean Supply and Use Source: USDA-WAOB

  15. World Corn Production Source: USDA-WAOB

  16. World Soybean Production Source: USDA-WAOB

  17. U.S. Meat Trade Million pounds Source: USDA-WAOB

  18. Corn Export Sales Source: USDA-FAS

  19. Soybean Export Sales Source: USDA-FAS

  20. Corn Grind for Ethanol

  21. Current Corn Futures 4.02 3.87 3.48 Source: CME Group, 5/30/2017

  22. Current Soybean Futures 9.47 9.19 9.11 Source: CME Group, 5/30/2017

  23. Iowa Corn Prices vs. Costs

  24. Iowa Soybean Prices vs. Costs

  25. Thank you for your time!Any questions?My web site:http://www2.econ.iastate.edu/faculty/hart/Iowa Farm Outlook:http://www2.econ.iastate.edu/ifo/Ag Decision Maker:http://www.extension.iastate.edu/agdm/

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