August 22, 2017
Negative Cash Rent Farmland Returns Since 2014 Reduced Farmer Net Incomes
In recent years, many farmers have had positive incomes. However, cash rented farmland may not have been contributing to those positive net incomes. At average cash rent levels, cash rented farmland has reduced farmer net incomes in 2014 and 2015. Often, positive returns from owned and share rented farmland offset negative returns from cash rented farmland. Herein, returns to owned, share rented, and cash rented farmland are quantified after background information is presented.
August 21, 2017
Weekly Outlook: Assessing the Prospects for 2017 Corn Production
The August Crop Production report surprised many market observers by forecasting 2017 corn production at 14.153 billion bushels. In particular, the corn yield forecast of 169.5 bushels per acre came under scrutiny due to higher than expected yield forecasts in major producing states. The question is whether the corn production forecast will change enough to result in higher prices than those currently reflected the market.
August 18, 2017
Upon Further Review: the Decision on EPA's RFS Waiver Authority
On July 28, 2017, the U.S. Court of Appeals for the D.C. Circuit handed issued its decision in the lawsuit over EPA's interpretation of the Renewable Fuels Standard (RFS) and its waiver authority. After years of litigation, the decision may add much-needed clarity to the RFS, albeit a result that falls short of the original goals for 36 billion-gallons by 2022.
August 17, 2017
Comparing Economies of Size: Milk vs. Field Crops
The farmdoc daily article of May 25, 2017 explored the substantial economies of size in producing milk and its relevance to U.S. dairy policy. A follow-on question of interest is, "How do economies of size compare for milk and other program commodities, notably field crops?" A recent analysis of economies of size on crop farms (Key) permits one perspective on this question. Economies of size are found to be more pronounced for milk. In particular, per unit cost declines more slowly for larger than smaller crop farms but declines at roughly the same rate across all dairy farm sizes.
August 16, 2017
Biomass-Based Biodiesel Prices--How Much Does Policy Matter?
Biomass-based diesel, which includes both biodiesel and renewable diesel, plays a critical role in compliance with RFS mandates. Since 2013, biomass-based diesel (BBD) has been the "marginal gallon" for complying not only with the advanced mandate but also the conventional (ethanol) mandate due to the constraints on ethanol consumption presented by the E10 blend wall. In the farmdoc daily article of July 19, 2017 we estimated the amount of BBD required to fill the BBD mandate and also fill the advanced and conventional gaps would be near three billion gallons in both 2017 and 2018. In the farmdoc daily article of July 26, 2017 we took advantage of the unique opportunity for identifying and estimating BBD supply curves due to the expiration of the biodiesel tax credit in 2016. The estimated supply curves have the interesting characteristic of being extremely price elastic. Most recently, in the farmdoc daily article of August 9, 2017 we examined a recent Court ruling invalidating the EPA's interpretation of its waiver authority under the RFS and the range of remedies that the EPA could consider.