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The Evolving Nature of Precision Ag: Forwards towards the 2040s
Full text linkThat practical philosopher, Yogi Berra, has been quoted as saying, “It’s difficult to make predictions, particularly about the future” (Laidler). He is, of course, correct and the observations offered here shouldn’t be assessed as predictions. A better term might be speculations, based upon the path of precision agriculture to date, societal needs, and an incomplete assessment of relevant technologies currently in late-stage development or early-stage commercialization. Implementation of those technologies, if successful, is likely to have significant impact on how decisions in the ag sector are made
Fixing Holes in the Current Crop Safety Net
Full text linkThe overarching policy narrative of this article is that holes exist in the current design of commodity programs, including an expected lack of commodity program payments of notable size until Fall of 2026 (farmdoc daily, October 22, 2024). Instead of passing ad hoc economic assistance, this article proposes a new multiyear risk program (MYR) as a better use of the funds and as more likely to fix holes in the crop safety net. As proposed, MYR would replace the current ARC (Agriculture Risk Coverage) commodity program and offer an alternative to ad hoc assistance. MYR payments are estimated to exceed 10 billion to 2025 crops if current low prices continue through 2025 and all acres are in MYR. These MYR payments can be made in the Fall of 2024 and Fall of 2025, respectively; or nearly two years and one year earlier than ARC and the other commodity program, PLC (Price Loss Coverage), are expected to make sizable payment. No presumption exists that MYR is the only design of a multiyear risk program, thus another objective of this article is to encourage discussion of needed changes to the crop safety net
Changes in the Number of Commercial Bank Branches in Rural Areas
Full text linkThe number of commercial bank branches in rural areas has steadily declined over the past decade, raising concerns about the availability and accessibility of financial services in these communities. Between 2012 and 2017, over 40% of rural counties lost bank branches, with some counties experiencing substantially more declines (Board of Governors of the Federal Reserve System, 2019). Compared to the rest of the country, rural Americans have a higher reliance on brick-and-mortar bank branches, more limited access to the Internet and online banking options, and a greater likelihood of living in banking deserts (Consumer Financial Protection Bureau, 2022). Furthermore, people living in rural areas are disproportionately affected by this trend, having to travel farther to access banking services, with the median distance to the nearest branch being 0.64 miles away following a closure, compared to 0.18 miles in urban areas (Dahl et al., 2021). In this farmdoc article, we examine the trends in the number of commercial bank branches in rural counties between 1994 and 2023
Squeezing the Farmer, Part 1: Initiating Examination of a Persistent Challenge
Full text linkFear not, the 118th Congress has achieved the bare minimum, passing a continuing resolution that funds the federal government through December and avoids a shutdown prior to the election (The Washington Post, updated September 25, 2024; Hubbard, September 25, 2024). Reauthorization of the Farm Bill was not included (White, September 26, 2024). The potential for a lame duck longshot on reauthorization remains in the discussion for an expected post-election session (Abbott, September 25, 2024; Grebner, September 26, 2024). This article opens a series examining a long-recognized and persistent challenge for farmers and farm policy: falling prices and incomes when costs and expenses do not decrease, or do not fall as fast
Higher Costs and Lower Grain Prices Lead to Lower Farm Earnings in 2023
Full text linkBased on Illinois Farm Business Farm Management Association (FBFM) records, average farm operator returns for labor and management on 2,013 Illinois farms was much lower for all geographic areas in the state in 2023 compared to 2022 and below the average for the last five years. Higher costs, along with lower grain prices were the main reasons for the lower incomes. Livestock farmers were also much lower.
Farm earnings were highest in the central and east central areas of the state. Earnings were lowest in the far southern part of the state
A Tale of Two Oilseeds: Soybean Saga, Part 3
Full text linkFlowering plants producing pods of peas or beans are legumes; key sources of plant-based protein, legumes can also help improve soil fertility because the plants biologically fix atmospheric nitrogen. Oilseed crops are legumes the seeds of which have relatively high oil content and are a source of vegetable oils for cooking. Soybeans and peanuts are two of the main oilseed crops in the United States, with peanuts being notable for producing seed pods underground and also known as groundnuts (Singh, Chung, and Nelson, 2007; Wolf, 2007; Herridge and Rose, 2000; Potter, 1998; Hoshikawa, 1991; LaRue and Patterson, 1981). As discussed in Part 1 of this series, soybeans were first domesticated by farmers in China possibly over 3,000 years ago and were first planted here in 1765 (farmdoc daily, November 30, 2023). Peanuts trace to South America, likely Northern Peru, possibly more than 8,000 years ago with evidence of cultivation over 3,000 years ago; first cultivation in the U.S. remains uncertain, although some evidence exists of earliest farming of peanuts in the seventeenth century (Hammons, Herman, and Stalker, 2016). Coincidentally, these two oilseeds were first added to the realm of program crops—those crops with base acres and for which farm program payments could be made—by Congress in 2002
Weekly Farm Economics: SCO and ECO Payment Prospects for 2024
Full text linkPrice declines for corn and soybeans continue to drive return expectations for the 2024 crop year lower and increase the likelihood of payments from crop insurance and commodity programs. Recent articles have examined prospects for individual crop revenue insurance and commodity program (ARC and PLC) payments (see farmdoc daily articles from August 6, 2024 and August 13, 2024).
Today’s article looks at payment scenarios for the Supplemental and Enhanced Coverage Option (SCO and ECO) policies which supplement a producer’s underlying individual coverage with additional area-based coverage. At current futures price levels, payments from ECO seem likely for 2024, particularly if county yields are not too far above trend yields. Area (usually county) yields at or above expected levels would negate payments from SCO at current price levels
Insights for Supply, Ending Stocks, and Prices from FSA Acreage Data
Full text linkOn Monday August 12, the National Agricultural Statistics Service (NASS) of the USDA released new planted acreage estimates for major crops in its monthly Crop Production report. For the first time, NASS used data on crop acreage enrolled in farm programs from the USDA Farm Service Agency (FSA) to update in August its planted acreage estimates for corn and soybeans. In previous years, NASS only updated acreage estimates for corn and soybeans using FSA data in September. This change reflects that, in recent years, nearly all planted acres are enrolled in FSA farm programs and those acres are nearly all enrolled by August. The Crop Production report lowered the corn planted area estimate from 91.5 to 90.7 million acres and increased the soybean estimate from 86.1 to 87.1 million acres
ARC and PLC Payment Prospects for 2023 and 2024
Full text linkRecent farmdoc daily articles have discussed the impact of declining prices on corn and soybean return projections in Illinois (see farmdoc daily, July 30, 2024) and the prospects for crop insurance payments to cover revenue losses (see farmdoc daily, August 6, 2024) in 2024. To summarize, corn and soybean price declines through July have led to even lower farmer return projections than in crop budgets released in June. However, current expectations for good to excellent crop yields, despite lower prices, suggest that significant crop revenue insurance payments are unlikely for the 2024 crop year.
Today’s article shifts the focus to the commodity programs administered by USDA’s Farm Service Agency (FSA) - Ag Risk Coverage (ARC) and Price Loss Coverage (PLC). We discuss how current estimates and projections for marketing year average (MYA) prices for 2023 and 2024 impact prospects for payments from the ARC and PLC programs in both years. Overall, farmers in Illinois should not expect commodity title payments for 2023 production which, for corn and soybeans, would occur in October of 2024. There is greater potential for commodity program payments associated with 2024 production, but much could still change over the course of the marketing year
Use of Supplemental Coverage Option by Crop
Full text linkCurrent public versions of both the House and Senate farm bills increase the subsidy and coverage levels for SCO (Supplemental Coverage Option) insurance. This article therefore examines the use of SCO for the large acreage field crops of barley, corn, grain sorghum, peanuts, rice, soybeans, and wheat (see Data Note 1). Use of SCO has increased since its implementation in the 2015 crop year. During 2021-2023, use of SCO was relatively highest for peanuts and rice and relatively lowest for corn, soybeans, and grain sorghum. Assuming current use indicates future use, SCO enhancements will likely benefit crops associated with the Southern US relatively more and crops associated with the Midwestern US relatively less. These differential relative benefits are consistent with SCO’s design that (a) makes SCO’s value relatively higher for crops with the lowest individual farm insurance coverage and (b) with its restriction that limits the use of SCO to land enrolled in the PLC (Price Loss Coverage) commodity program