by David A. Widmar
Lower fertilizer prices have been a welcome relief for producers facing falling commodity prices and farm incomes. Fertilizer prices offered big cost relief in 2016 and were the largest source of total cost reductions. These fertilizer price reductions came even with strong quantities of fertilizer demanded from a large corn crop; U.S. corn acreage was up 7% from 2015 and was the third highest acreage since 1944. Given lower fertilizer prices but strong usage from increased corn acres, this week’s post takes a look the prospects of even lower fertilizer prices again in 2017. Continue reading
by Brent Gloy
As we pointed out in an earlier article, the economic situation surrounding wheat production is particularly tenuous. Today wheat prices are very low and the economics of producing wheat are particularly poor. In some areas of the Great Plains cash wheat prices are within cents per bushel of cash corn prices. For instance, you can see the Kansas bids here, Nebraska here. This situation made us wonder about wheat price levels and the value of wheat relative to corn has evolved over time. Continue reading
by David A. Widmar
In May the USDA provided an update on the Conservation Reserve Program (CRP). Media headlines from this announcement were something along the lines of “USDA adds more than 800,000 acres” to program. After digging into the data a bit more, it seemed an alternative headline might be: “CRP Program Declines Continues; 900,000 fewer acres in 2017.”
While we have covered the CRP program trend towards fewer acres in earlier posts (here and here), we continue to find the program’s contraction a bit fascinating; especially given the current financial headwinds for production agriculture. Furthermore, it seems that most are unaware of this policy trend. This week we re-visiting the CRP program and evaluating why efforts to ‘Make CRP Great Again’ may soon be underway.