Fixed farm expenses play an important but often overlooked role in crop budgets and producer returns. A look at Purdue University crop budgets from 1990 to 2014 found that, on average, variable expenses accounted for 40% of total budgeted expenses while fixed expenses (family labor, land, and machinery) accounted for 60%.
Lowering costs of production are a critical step for managing in the current environment of low commodity prices and tight-margins. Fixed expenses, as we noted last year, have been slow to adjust. This week’s post takes an updated look at fixed expenses. Continue reading →
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.
The 2014 Farm Bill made several changes to U.S. farm programs. The most notable was probably the elimination of Direct and Counter Cycle Payment (DCP) and Average Crop Revenue Election (ACRE) programs and the development of the Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) programs. While work is already underway on developing another farm bill, we thought it would be a good time to examine how producers in different regions have fared under the current and previous farm bills. Continue reading →