The median total income of farm households has increased steadily over the past five years (in both nominal and inflation-adjusted terms), peaking at an estimated $80,620 in 2014.
However, it is forecast to decrease slightly in 2015, to $79,287. Households with commercial farms – operations which earn at least $350,000 in gross cash farm income – derive roughly three-fourths of their income from farming.
Conversely, off-farm income contributes substantially to the total income of many farm households, especially those with smaller farms or a primary occupation other than farming.
Farm households, on average, derive roughly 60 percent of their off-farm income from wages, salaries and operating other businesses, while the remaining portion comes mostly from interest, dividends, and private and public transfer payments.
Farm household median income remains higher than the median income of U.S. households, which was $51,939 in 2013 (the latest figure available).
Less corn out there
From an analysis of more than 1 million corn fields daily, Descartes Labs’ infrared satellite images showed U.S. production is 2.8 percent smaller than the government estimates.
Output will be 13.3 billion bushels, the Los Alamos, New Mexico-based company said.
That compares with 13.34 bb estimated last month by Descartes and 13.686 bb forecast by the U.S. Department of Agriculture on Aug. 12.
Lower yields and acreage caused by excessive rain from Missouri to Ohio in June and July are “clearly visible” on computer-generated maps from the previous 30 days, Descartes Chief Technology Officer Steven Brumby said Sept. 3 in a telephone interview.
The biggest declines from 2014 were in Howard County, Indiana, and Hardin and Logan counties in Illinois.
“The crop ran out of gas and turned toward maturity more quickly, and that will lead to a poor outcome,” Brumby said.
“USDA August predictions for corn yield and production are significantly overestimating conditions on the ground.”
National yields will be 164.8 bushels an acre, Descartes said. That’s down from the company’s estimates of 164.9 bushels last month and 168 bushels in July.
On Aug. 12, the USDA projected 168.8 bushels.
The company said that harvested acreage is 80.68 million, down from the 81.1 million forecast by the government. To make crop forecasts, Descartes studies 30 million pixels of agricultural fields a day, and its computer programs compare the results with 10 trillion pixels of satellite imagery from the past 10 years.
The company is named after the 17th century French mathematician and philosopher Rene Descartes, who discovered that the position of a point can be determined by coordinates.
The firm started as a project at the Los Alamos National Laboratory in 2007. Brumby said the labs are developing programs to forecast all major crops in the U.S. and plan to make projections for global crops.
New satellite images available next year will enhance the view from space.
“We are on the cusp of more data,” which can double or triple the number of observations, Brumby said.
Corn closed the week 24.5 cents higher.
Last week, private exporters reported a 120,000-metric-ton corn sale to Mexico.
Weekly export sales showed corn sales were 17.3 million bushels for new crop corn.
New crop sales are 40 percent behind last year’s sales pace.
In the weekly crop progress and conditions report, USDA reported corn conditions were unchanged at 68 percent good/excellent.
Seventy-six percent of the crop was dented versus 75 percent average and 20 percent was mature versus 26 percent on average.
According to NASS, yields are expected to average 167.5 bpa, down 1.3 bpa from the August forecast and down 3.5 bpa from 2014.
If realized, this will be the second highest yield and third largest production on record for the United States.
This places production forecasts at 13.585 bb versus 13686 bb last month.
U.S. corn ending stocks were lowered to 1.592 bb, down 121 mb from September.
This was due to lower production, but also lower carry-in supplies as old crop exports were boosted 20 mb and ethanol use was raised 5 mb.
Global corn stocks were lowered 5.4 million metric tons to 189.7 mmt. Harvest has not started yet in the majority of growing areas, suggesting it is too early for a harvest low.
Strategy and outlook: Producers:
- Are 100 percent sold of the 2014/15 crop.
- Sold 50 percent of 2015 production and own December puts on balance of production.
- Will exit puts when December hits $3.35.
- Sold 20 percent of 2016 crop.
Soybeans closed the week 8.25 cents higher.
Last week, private exporters announced sales totaling 300,000 mt of soybeans to an unknown destination.
Weekly export sales of new crop soybeans were 54.1 mb, a marketing year high for the second consecutive week.
The weekly crop progress report showed soybean ratings posted a 1 percent move from excellent to good, but the good/excellent was unchanged at 63 percent.
Eighteen percent of the crop was dropping leaves compared to 16 percent on average.
The USDA said U.S. soybean production is forecast at 3.94 bb, up slightly from August, but down 1 percent from last year.
Based on Sept. 1 conditions, yields are expected to average 47.1 bushels per acre, up 0.2 bushel from last month, but down 0.7 bushel from last year.
Area for harvest in the United States is forecast at a record 83.5 million acres.
U.S. 2015/16 soybean ending stocks were lowered 20 mb to 450 mb which is mostly a function of reduced carry-in.
Old crop crush was raised 25 mb to 1,870 mb. Exports were raised by 10 mg.
Old crop stocks were lowered to 210 mb, versus 240 mb in August.
Global soybean stocks were lower by 2 mmt to 85 mmt, which is mostly a function of lower (U.S.) carry-in supplies.
Strategy and outlook: Producers;
- Are sold 100 percent of 2014/15 production.
- Sold 50 percent of 2015/16 production and own November puts on balance of production.
- Will exit puts when November hits $8.35.
- Sold 20 percent of 2016 November.
This material has been prepared by a sales or trading employee or agent of Midwest Market Solutions and is, or is in the nature of, a solicitation. This material is not a research report prepared by Midwest Market Solution’s Research Department.
Brian Hoops can be reached at (605) 660-1155.
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