FARM AND FOOD FILE
Before spring arrives and our attention turns to blue sky, dancing daffodils, and why the corn planter’s GPS isn’t working, let’s take a few minutes to lock in key numbers that will dominate the still-young farm and ranch year.
For example, as of March 8, Congress has 66 legislative days remaining until its lengthy August break.
That’s 66 days to debate and hopefully pass all or parts of promised Obamacare reforms; complete an overhaul of the complex federal tax code; design and fund the President’s $1-trillion infrastructure spending plan; tackle the White House’s proposed, multi-billion-dollar border wall with Mexico; and, if farmers and ranchers have their way, outline the essential elements of a 2018 farm bill.
All this Herculean lifting, however, still excludes raising the federal debt ceiling by March 31, tackling the very unbalanced Trump budget plan by Oct. 1, and conducting investigations into alleged Russian connections to current White House and former Trump campaign staff.
Other important numbers to keep in mind this year are contained in the Feb. 13 U.S Department of Agriculture’s Net Farm Income Forecast. Most are, predictably, bleak.
According to USDA, 2017 net farm income will be $62.3 billion, down 8.7 percent from 2016, the fourth consecutive year of decline, and the lowest since 2002 that, coincidentally, was another farm bill-writing year.
Even more worrisome, 2017 farm asset values will drop $32 billion nationwide, farm debt will increase 5.2 percent, or a modest $20 billion, and farm equity will decline another $51 billion after a $61 billion decline the year before.
USDA’s 2017 crop acreage and production forecast, released Feb. 24, confirms the income numbers. Big acres and big crops, barring weather disasters, are seen for both corn and soybeans.
Projected 2017/18 prices are anything but big; $3.70 for corn and $9.60 for soybeans are just a dime taller than 2016 average prices for both.
The real surprise contained in the number-packed report was 2017 wheat acreage. USDA pegs it at a shockingly small 46 million. That’s 10 million acres less than just three years ago and a collapse of nearly 30 million acres since peak plantings in 1981.
The drop-off is due to two causes, explains USDA: ” declining returns compared with other crops and changes in government programs that allow farmers more planting flexibility.”
That’s the official line. Unofficially, climate change and today’s crop insurance-based farm bill are the key reasons higher valued corn and soybean acres continue to replace lower-return wheat in Kansas, South Dakota and North Dakota.
Some other numbers are just as revealing as the wheat data.
For example, two weeks ago the White House proposed cutting the 2018 Environmental Protection Agency budget by nearly 25 percent. Few rose to defend the agency, but EPA’s current budget is, in fact, surprisingly small – $8.1 billion, or just under 0.25 percent of all annual federal spending.
By comparison, direct government program payments paid to U.S. farmers this year will hit $12.5 billion, or 50 percent more than all EPA spending and six times the proposed EPA budget cuts.
Despite the slow U.S. ag economy, the Australian ag sector is poised to enjoy its fourth record-setting year in row. The bullishness spurred one Aussie mining baron and a partner to pay $294 million (U.S.) for the nation’s biggest cattle ranch, S. Kidman & Co., last December.
Just how big is big by Down Under standards?
The ranch includes 19.2 million deeded acres and leases for another 24.9 million acres. Combined, leased and owned acres are equal in size to North Dakota. The new owners will need it: they have a combined cattle herd of 300,000 head.
Still, commented the new owner, 300,000 head only puts her company in the top three of the nation’s cattle producers.
The Farm and Food File is published weekly through the U.S. and Canada. Past columns, events and contact information are posted at www.farmandfoodfile.com.
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