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Agriculture News

From The Dairy Crisis To Rising Interest Rates, An Agricultural Economist Answers

Forbes | Posted on September 6, 2018

In face of the recent dairy price crisis, the focus has been on making the U.S. dairy support system more robust, with no real energy on the supply control side. Since dairy is increasingly a global market, it is hard to see a policy solution to this crisis. If low prices continue, that will reduce farmers' incentives to adopt new technologies, and over time demand might finally catch up with supply, but it could be a long hard slog to get there.

The Economic Benefits of Local Food Dollars to Workers, Farms and Communities

Choices magazine | Posted on September 6, 2018

Overall, the articles summarized here show that local food producers spend proportionately more on labor, other variable expenses (including hand tools, supplies, and farm shop power equipment; other unrecorded expenses; and vehicle registration fees) and utilities than do commodity producers; moreover, as scale of production increases, labor’s share of variable costs also increases. An implication of these findings is that local food production may create jobs as well as stimulate proportionately larger spillover impacts on the local economy than nonlocal production. The results show that profitable local food producers exist across all sales classes and market channels, signaling there are viable business models for a variety of farms and ranches to pursue within this niche. Finally, analysis focusing on the most profitable producers sheds light on what types of business models enable producers to flourish in this market segment and provide guidance for future programming and policies.

The Evolution of the Local Brand, Policy Initiatives and Role of Direct Markets in the Agriculture Portfolio

Choices magazine | Posted on September 6, 2018

One trend worth noting for local foods is that growth in some subsectors appears to be maturing, particularly in direct-to-consumer outlets. Despite a 5.5% increase in the number of farms utilizing direct-to-consumer marketing outlets between 2007 and 2012 observed in the Census of Agriculture, there was no change in overall sales as intermediated markets became a more significant channel for those marketing local (Low et al., 2015). Although much of the initial interest in local foods originally revolved around farm-fresh produce, a growing array of local food products that require some level of manufacturing (meats, salsas, baked goods, and fruit-based beverages) is appearing alongside farm products and may represent opportunities for growth since consumers value more convenient or artisanal offerings. The growing visibility, complexity, and programming targeted at local foods motivate this issue’s theme. In this issue, we explore the transformation of local food markets across several dimensions and consider how local food labels and framing, policy, and farm performance may all be influencing local food dynamics. In a subsequent, complementary issue, we will delve more into the consumer issues affecting this sector. “Local food”—much like “value-added agriculture”—is an umbrella term for this sector, so only varying consumer perceptions and a broad USDA definition for local foods exists. In their piece, Holcomb et al. provide a classification system of terms as a resource for this sector of the food economy. Terms and meanings in these markets are both emerging and evolving. They posit that a better taxonomy of local foods will better equip consumers, producers, government entities, NGOs, and land-grant universities to frame, implement, and identify gaps in marketing promotions, programming, and policy needs related to local food systems.

Mapping stress in agriculture lending

Kansas City Fed | Posted on September 6, 2018

Repayment rates for farm loans have declined every quarter since the second quarter of 2013, suggesting heightened stress in agricultural lending. If repayment rates continue to decline—and the outlook for the agricultural sector remains downbeat—agricultural banks could become less able to lend to creditworthy farm borrowers. Thus, declining repayment rates could lead to adverse outcomes for agricultural banks, farmers, and the rural economies they serve. Cortney Cowley uses data from the Federal Reserve Bank of Kansas City’s Ag Credit Survey to model and map areas with the highest probability of stress in agricultural lending. She finds that the largest increase in stress over the past decade occurred in 2016. She also finds that lower crop revenues, lower off-farm income, lower farmland values, lower concentrations of farm earnings, and higher interest rates are associated with higher stress in agricultural lending.

Dairy farmers say denting supply management in NAFTA deal would be 'devastating'

Vancouver Courier | Posted on September 6, 2018

Nearly 1,000 kilometres from Washington, where a team of top Canadian negotiators sit in 11th-hour NAFTA discussions, Peter Strebel works under a cloud of concern at the rural Quebec dairy farm his father founded in 1976. The Quebec milk producer is worried that rumblings that Canada may sacrifice part of the sacred cow of supply management as a concession in trade negotiations with the United States would “punish” the dairy industry, open the floodgates to American milk products and prompt thousands of farm closures north of the border. Nearly 1,000 kilometres from Washington, where a team of top Canadian negotiators sit in 11th-hour NAFTA discussions, Peter Strebel works under a cloud of concern at the rural Quebec dairy farm his father founded in 1976.The Quebec milk producer is worried that rumblings that Canada may sacrifice part of the sacred cow of supply management as a concession in trade negotiations with the United States would “punish” the dairy industry, open the floodgates to American milk products and prompt thousands of farm closures north of the border.Canadian dairy operates under a supply management system, in which farmers are protected from competition because the government blocks out foreign production with high tariffs and sets quotas to limit production and prevent market saturation. With traditional market forces removed, the government decides how much farmers are paid for their production, helping to keep farmers' incomes stable.The protectionist policy, a staple of Canadian agriculture for more than 40 years, has come under periodic attack from U.S. President Donald Trump.

New Iowa Law Makes Keeping Farm Together Easier

DTN | Posted on September 6, 2018

No family wants to end up in court arguing over how inherited farmland will be divided. It's even more discouraging when one owner wants to keep the land, but the court orders all the owners to sell. Iowa just passed a law in 2018 that allows a way to equalize the property without a sale. The result: Person(s) wanting to sell can get cash out, while owner(s) preferring to keep the family farm are not forced to sell. Only 10 other states have a similar law: Alabama, Arkansas, Connecticut, Georgia, Hawaii, Montana, Nevada, New Mexico, Texas and South Carolina.In most states, disputes between owners who inherit land and cannot agree on how to split the property often end up with the court ordering a "partition by sale." Then the proceeds from the sale are proportionally divided among all the owners.Alternatively, a more congenial way to divide property is "partition in kind" where the parcels are physically divided to carve out a separate piece for each owner. Then each owner can do what he or she wants to do with the individual pieces of land. However, it is difficult sometimes to divide the land into equal portions or the parties are opposed to the land being divided this way.

Bayer vague on lawsuit strategy

Daily Yonder | Posted on September 6, 2018

It’s been two weeks since the merger between Bayer AG and Monsanto officially began its integration, two months since the deal closed and nearly two years since the planned deal was announced.  Despite that, newly appointed Bayer officials are vague on how they plan to handle the mountain of lawsuits inherited from Monsanto over pesticides such as glyphosate and dicamba.  These lawsuits have plagued Monsanto, most recently in an August 10 court decision that ordered the company to pay $289 million in damages. But at the Farm Progress Show in Boone, Iowa, Wednesday, Brett Begemann, Bayer’s new chief operating officer and former Monsanto executive, was non-committal on the newly integrated company’s approach. “First of all, remember we’ve been together eight days,” said Begemann, referring to the mandate by the U.S. Department of Justice that disallowed the two companies from making any plans until August 16. “We continue to learn, just like any company, from feedback from our customers. We’ll continue to listen to that feedback, engage in that conversation, look at additional research, and move on from there.” 

Agriculture Uncertainty

OFW Law | Posted on September 6, 2018

The agriculture industry in the U.S. is dealing with a lot of uncertainty. Falling prices and trade wars top the list. We expect our exports to grow faster than our imports. However, for 3 years in a row, that has not been happening. We are losing ground. Looking to 2019, pork exports are expected to decline by $300 million and beef by $100 million.A little bit of good news – poultry will be up slightly, and also wheat. Net farm income is forecast to drop $9.8 billion. Pulling everything down more than anything else – you guessed – soybean exports, which are expected to drop $800 million.Yes – the trade war has been very disruptive for our industry. But part of the price decline problem is self-inflicted. We are expecting a record crop of corn and soybeans. Our feed lot supplies of beef have jumped up almost 8%. Hog numbers are up 3.4%. Who is going to consume all of this food if we can’t expand exports?

Bayer says more Americans are alleging Monsanto weedkillers cause cancer

Wall Street Journal | Posted on September 6, 2018

Bayer said the number of American plaintiffs alleging its recently acquired weedkillers cause cancer has risen sharply, adding to concerns about potentially lengthy and costly litigation stemming from its acquisition of Monsanto. The German chemicals company on Wednesday also lowered its full-year earnings outlook because of delays in closing its $63 billion purchase of Monsanto, which included a portfolio of herbicides that contain glyphosate, notably flagship product Roundup.Bayer said it faced some 8,700 plaintiffs across the U.S. as of late August—mainly cancer patients who claim to have fallen ill after being exposed to the glyphosate-containing Monsanto herbicides. As of late July, the number of plaintiffs stood at about 8,000, up from 5,200 a few months earlier.

US dairy struggles to keep Chinese market under tariffs

Agri-Pulse | Posted on September 6, 2018

U.S. dairy exporters are losing money as they try to maintain their hard-won footholds in the Chinese market amid the rising tariffs resulting from President Donald Trump’s trade war. Some U.S. exporters – sellers of relatively low-cost nonfat dry milk powder – have already had to give up, but many who depend on China to buy whey, cheese and other pricier products are hanging on for now, says U.S. Dairy Export Council (USDEC) President and CEO Tom Vilsack.It’s a tough situation that’s only degrading as U.S. companies lose ground to competitors in Australia, Europe and New Zealand.