Rates of Return in U.S. Agriculture

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by Brent Gloy

Most of those involved in agriculture understand that farming can be a volatile business, with wide swings in profitability and earnings. But just how wide are those swings and on average what should one expect in terms of a return for their investment in agricultural assets? This week we take a look at the historical experience of the rate of return on assets in agriculture. Continue reading

Clues From Crop Insurance Price Discovery

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by Brent Gloy

Planting intentions for 2016 will draw considerable attention in the coming months. Crop insurance guarantees are one factor which will play into this decision. As we pointed out last year, crop insurance guarantees have fallen considerably in the past two years and barring a rally, guarantee prices are likely to be lower again this year.

At current levels, crop insurance will not guarantee revenue sufficient to cover variable costs plus land rents. The relative levels of corn and soybean prices are similar to last year and do not appear to suggest a large shift in acres from last year. Continue reading