September 2, 2015
What Happens When Food Marketers Require Restrictive Farming Practices?
Food characteristics that matter to some intermediary buyers or consumers now include specifics of the production process (e.g., use of chemicals, geographic location of the farm, or treatment of farm animals), perceived fairness of marketing arrangements to farmers or farm laborers, and perceived implications of production and consumption of the product for the environment. New demands on producers and marketers have been met by innovative market responses that have expanded consumer choices. For example, more food is now marketed as locally grown, and niche producers and marketers have emerged to meet demands for free-range meats and cage-free eggs.
September 1, 2015
Cutting $100 per Acre in Costs for Corn and Soybeans
In an August 4th farmdoc daily article, cost reductions of $100 per acre were suggested to avoid losses on 2016 corn and soybean production. The $100 per acre reduction suggestion has generated comments, questions, and suggestions. In this article, responses to some of the more prevalent comments and questions are provided.
August 31, 2015
Weekly Outlook: Lower Pork Costs Also Driven by Lower Meal Costs
Soybean meal is an important but an "economically" secondary feed ingredient in hog diets compared to corn. My estimates suggest that soybean meal costs have been about 22 percent of the total costs of raising hogs over the past decade, compared to 32 percent for corn.
August 28, 2015
Where Are Gasoline Prices Headed?
Crude oil prices have once again been making headlines, dipping into the upper $30s and lower $40s per barrel. In an article last week, it was shown that real (inflation-adjusted) prices of crude of oil and gasoline have fallen back to levels prevailing more than a decade ago. It was further argued that if real prices continue near these levels, this would provide compelling evidence that the great "super-cycle" in crude oil prices that began in 2004-2005 was coming to a close. The purpose of today's article is to analyze prospects for U.S. "pump" gasoline prices in the near-term given the recent slide in crude oil prices.
August 27, 2015
Variation in ARC-CO Payment per Program Base Acre by County
This article examines the variation across counties in ARC-CO (Agriculture Risk Coverage -County program) payments per program base acre, using estimated corn and soybean payments for the 2014 crop year as an illustration. Understanding the variation in payments is important to understanding the impact and operation of ARC-CO, as well as other revenue and yield based risk programs. In particular, the non-trivial variation in county payments by ARC-CO implies that the decision by Farm Service Agency (FSA) to make payments based on the county in which the FSA farm is administered not the county in which the FSA farms lies also potentially non-trivial.