USDA Cost of Production Estimates Show Little Change from 2016

by Brent Gloy

According to the latest USDA cost of production estimates, U.S. farmers will find the 2017 cost of producing corn, soybeans, and wheat basically unchanged from 2016.  Combined with the outlook for flat to slightly better commodity prices, the cost of production estimates portray yet another year of challenging economic conditions throughout corn, soybean, and wheat country. Continue reading

ARC-CO Yield Guarantees Increase Across Much of the Country

by Brent Gloy

Direct farm program payments have again become a critical component of net farm income.  In 2016 direct farm program payments are forecast to account for $13 billion of the sector’s $68 billion (19%) of net farm income.  At $5.9 billion the ARC-CO program is by far the largest category of direct farm program payments.

As we have discussed before, the price guarantees of the ARC-CO program have already begun to decline and this decline will likely accelerate for the 2017 crop year.  However, ARC-CO is a revenue based program, so guarantees are also dependent upon county level yield histories.  Given that the U.S. has harvested three very large corn and soybean crops in a row, we thought it would be interesting to see how the county level yields have changed over the course of the program.  Continue reading

Trends in Corn Consumption

by Brent Gloy

Increases in agricultural productivity and aggressive expansion of cropland acres have made increased demand growth critical to improving the economic situation in agriculture.  With that in mind we thought it would be interesting to look at some of the trends in global corn consumption. Continue reading