Off-Farm Income to Save the Day?

by David Widmar

We frequently utilize the USDA’s farm income data to monitor and report about farm economy, especially given the large, rapid decline in farm incomes since 2013 (you can read our latest post on net farm income here). Often included in the USDA’s reports are comments and data about off-farm income. In November, for example, former Secretary of Agriculture Tom Vilsack commented in a press release that higher off-farm income are “expected to stabilize losses due to commodity prices.”

For this week’s post, we decided to consider off-farm income and what impact it has on farm households.

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Will Prevented Planting Acres Spring a Surprise?

by David Widmar

There has been a lot of talk about Spring planting progress and yield concerns in light of cool, wet May weather. Further speculation about the 2017 crop has been fueled by media reports of higher than normal replant acres. While there is little doubt the weather has resulted in reduced yield potential for some, it’s likely too early to understand what the overall, national impacts might be. While yields are important, an often overlooked weather impact is prevented plantings; acres that were intended for planting but never happened. This week’s post take a look at historic prevented planting acres and considers the impact of a swing in these acres. Continue reading

Wheat Basis Begins Recovery

by David Widmar

While the economic outlook for U.S. agriculture has been bleak in recent years, the challenge has been especially difficult for wheat producers. As evidence of these tough times, U.S. wheat acres, which have trended lower since the early 1980s, tumbled to new lows in 2016 and 2017. Furthermore, Brent previously examined the relationship between wheat and corn prices and found current wheat prices are historically low.

One of the most evident challenges wheat producers have faced in recent years has been a historically large gap between future prices – the price traded on the board of trade – and local cash prices. This difference –known as ‘basis’ – has been historically wide and creates challenges for producers’ marketing plans. This week’s post considers wheat basis data at three locations to look at the current situation as well as historical conditions. Continue reading