The 2018 U.S. Census of Agriculture is still reveling some interesting statistics that indicate that farm sizes are growing and that over all farm numbers have declined since the 2012 census by over 3%. According the census, there are 2,042,220 farms and ranches in the United States that utilize just over 900 million acres of land. About 243 million of these acres are dedicated to oilseed and grain production, while cattle operations and dairy farms use 405 million acres, and farms producing fruits, vegetable and nursery crops account for just 27 million acres of farmland the rest of the acres are used for forage production, cotton, and a variety of minor crops. The top five states ranked according to the number of farms and ranches include Ohio at number 5, with almost 88,000 farms, Oklahoma is number 4, Iowa is number 3, Missouri is in second place, and maybe you guessed it, Texas is number one with well over a quarter of a million farms and ranches.
Over the past two trading days, commodity markets reacted positively to the news that a phase one trade deal has been struck with China, but doubts still linger. On Friday, the Wall Street Journal reported that an agreement had been reached, but early in the day, President Trump told reporters that that was fake news. A couple of hours later though, a government spokesperson acknowledged that an agreement had been reached. Yesterday, commodity markets closed with corn up 7 cents per bushel, soybeans gained 14.5 cents and wheat out shined all of the grains by gaining over 17 cents for the day. While this news seems to indicate that the year-and-a-half ole trade war is finally winding down, ag economists are and trade analysts are telling farmers to be cautious about reading too much into the preliminary trade deal. Trade Representative Robert Lighthizer stated that larger farm exports would be a major element of the target of $200 billion a year in manufacturing, agriculture, services, and energy sales to China, and by the second year, the U.S. will almost double exports of goods to this country if the agreement is in place. But Joe Glauber, Senior Research Fellow at the International Food Policy Research Institute pointed out that officials spoke as if farm trade was running at $21 billion a year, a level seen before the trade war. So the minimum of $40 billion annually in sales would require an increase of $16 billion or so over the amount of agricultural products shipped to China in 2017, before the trade war started. On November 25th, Glauber said that “It will be very hard to get to the $40 bil let alone $50 billion promised.” So ag economists and farm management advisers are counseling farmers and ranchers to a while before inking contracts to buy new half million dollar tractors or signing a deal to purchase more land, because there are still too many unknowns about this trade pact.
Last week, Federal and state regulators issued guidance to clarify that financial institutions no longer need to report customers who are growing or cultivating hemp to federal banking regulators . In the past, Banks were required to file “suspicious activity reports”concerning customers who grew hemp related products, even after industrial hemp was approved as a crop in the 2018 Farm Bill. This guidance followed the recent release of the USDA’s regulations concerning growing hemp in the U. S. Even though industrial hemp, which is restricted to .3% THC, the active ingredient in marijuana, was approved as a legitimate crop in over half of the states, until the USDA regulation came out, federal regulations maintained that hemp was a Schedule one drug, which created a nightmare for some growers who shipped their crop out of their home state.
Farmers and ranchers welcomed last week’s snow fall even though it created some travel problems in the Four Corners Region. The precipitation was the first significant moisture since late last May. According to USDA Snotel reports the Region’s snow pack for November of this year was about 25% of what was reported in the Dolores, San Juan and Animas River basins in November of 2018. Snotel reports track snow water content, which is stored in the snow and released in the Spring. At this point, these river basin’s have about 60% of the average snow pack for the same date, which is calculated on a 30 year average. Looking at National Weather Service long range weather predictions, the Four Corners Region may have a bit higher than normal precipitation and temperatures through December, but over the next three months precipitation is mayreturn to normal with higher than normal temperatures.
The American Farm Bureau Federation’s 2019 survey about the price tag for a traditional Thanksgiving meal for 10 people found that it will cost just a penny more than it did in 2018. That amounts to less than $5 per person. Some of the items for this meal includes turkey, stuffing, mashed potatoes, cranberries, sweet potatoes, vegetables, pumpkin pie and whipped cream. Adding ham to the meal would only add about $.60 to the feast.
Farm finances continued to spiral downward during the summer according to a recent report from the Kansas City Fed. Bankers in the District reported that the agricultural economy and farm income remained stressed in 2019, with limited signs that they’ll improvement in 2020. The majority of agricultural lenders noted a decline in profitability across all reporting regions. Lenders were concerned about their agricultural borrower’s lack of liquidity, low income, and increased leverage on loans, while producers reported they were concerned about trade, tariffs and weather. Ag bankers in the Midwest and Plains understand that some farmers and ranchers will liquidate assets during the winter to stay afloat, while many highly leveraged operators will be forced out of business. Ag lenders in the District also expect higher ag loan delinquency rates heading into 2020 for both production and real estate loans. The American Bankers Association and Federal Agricultural Mortgage Corporation also released a survey of ag lenders last Monday that indicated that about 57 percent of farm borrowers were profitable in 2019, although many said that their profits were declining.
According to a recent Farm Bureau poll, 91% of the 3,000 women who participated in the survey said they want to see more women fill leadership roles in agriculture. The 2017 USDA-agricultural census, showing increased interest and employment of women in the industry. Today, female producers make up 36% of the nation’s farmers a 27% percent increase from the 2012 census results. Of the 2.04 million farms and ranches in the U. S., 38% are owned or managed by female operators.
Last Friday, USDA’s Animal Plant Health Inspection Service (APHIS) announced that it is suspending its plan to phase-in the use of electronic ID (RFID) tags for all cattle and bison that would be moved interstate after by January1, 2023 . According information from APHIS the plan was changed in response to an executive order that President Trump issued citing the need for transparency and communication of issues “before placing any new requirements on American farmers and ranchers.” In its statement withdrawing those regulations, APHIS said it has “listened to the industry’s feedback.” R-CALF USA filed a lawsuit in federal district court in Casper, WY, in October with the intent to halt the plan. Despite the executive orders withdrawing the plan, APHIS acknowledged the continuing need for a national animal ID program.
I recently reported that organic farm production continues to grow in the U. S. Farms that were converted to organic production grew by 2% in 2018, bringing the total organic acres to 6.5 million. But converting farms from conventional production to organic isn’t easy, since farmers face several challenges before they’ll reap the rewards of higher prices for what they grow. First, they have to use organic farming practices for three years without being able to sell what they grow as organically produced crops. Second, they also often see yield declines during the conversion process because of they’re not allowed to plant many of the seed varieties that conventional farmers use, and they have limitations concerning the types of fertilizers and pesticides they apply to their crops. To help farmers negotiate these challenges, Rabo Agrifinance recently announced that they’ve developed a new loan program directed at farmers who want to make this transition. The program gives farmers the flexibility to receive the needed capital for upfront costs associated with changing production practices, while providing repayment schedules that coincide with when they will receive the additional revenue from selling certified organic products.
Sustainability in agriculture has been picking up speed in 2019. In March, General Mills announced an initiative to advance regenerative agriculture on one million acres by 2030, which was followed by organization of the Sustainable Food Policy Alliance formed by Danone North America, Mars Corporation, Nestle USA and Unilever to accelerate of federal climate legislation. Recently Bayer AG, the largest supplier of seeds, crop protection and data acquisition in the world has jumped onto the ag sustainability bandwagon. Bayer acquired Monsanto Agrochemical Company last year just in time to be pulled into suits alleging that Roundup herbicide is responsible for causing cancer in people who have applied the popular weed killer. By 2030, Bayer pledges to reduce the environmental impact of crop production by 30%, reduce field greenhouse gas emissions and empowering 100 million small holder farmers in developing countries by providing more access to sustainable agricultural solutions. Last year, Bayer invested $2.5 billion in crop science research and development, and expects to spend an additional $25 billion on research and development over the next ten years.