January 17, 2018
How Should Farm Growth Options be Evaluated?
There are numerous motivations for farms to expand their businesses. Even in today's environment of tight margins, many farms are exploring expansion options. When exploring these options, it is important to address key questions pertaining to the farm's strategy. A previous farmdoc daily article discussed ten questions that should be addressed when examining challenges and opportunities associated with farm growth. This article focuses on the fourth question: how should farm growth options be evaluated?
January 16, 2018
Weekly Outlook: USDA Reports Provide Some Surprises
The USDA released a set of reports on January 12 containing information with implications for corn and soybean prices in 2018. The National Agricultural Statistics Service (NASS) released the final estimates of the 2017 U.S. corn and soybean crops and estimates of the stocks of corn and soybeans in storage as of December 1, 2017. Additionally, the World Agricultural Outlook Board reports provided new forecasts for global supply and consumption levels during the 2017-18 marketing year. The following discussion recaps the information contained in the USDA reports and the price implications associated with them for corn and soybeans.
January 12, 2018
Commodity Program Spending on Dairy and Cotton: Past and Projected Perspective
At this juncture in the debate over the next farm bill, two of the most discussed issues are what to do with commodity policy for cotton and dairy. Key considerations are the costs associated with (1) enhancing the dairy safety net and (2) making seed cotton eligible for ARC (Agriculture Risk Coverage) and PLC (Price Loss Coverage) payments. This article examines actual spending on dairy and cotton in the 1996, 2002, 2008, and 2014 farm bills and explores implications for future spending.
January 11, 2018
Reviewing the Latest Cotton Proposal
Congress is attempting to reach an agreement on funding the government for the remainder of fiscal year 2018; a short-term continuing resolution passed just before the holidays expires on January 19, 2018. Congress is also considering an emergency appropriations bill to provide assistance for hurricane and wildfire disasters (H.R. 4667). Included within the $81 billion disaster bill passed by the House is a provision to amend the 2014 Farm Bill and designate seed cotton as a covered commodity. Previous farmdoc articles have discussed cotton policy under the 2014 Farm Bill and the efforts by the cotton industry to make cotton base acres directly eligible for ARC and PLC payments. With implications for the upcoming farm bill debate, this article reviews the latest effort.
January 10, 2018
IFES 2017: Habits of Financially Resilient Farms
Over the past 10 years, returns on Illinois grain farms have changed dramatically. High commodity prices led to rising income and return levels from 2009 to 2012. Beginning in 2013, much lower commodity prices led to a period of declining return levels over the past 4 crop years as production and land costs have remained relatively sticky. An important question facing farm operators is whether there exist management strategies which consistently result in success. In other words, is it possible to be successful consistently across time even when returns are volatile?