Welcome to Agriculture Economic Tidbits, a weekly e-newsletter (emailed Mondays) for farmer and rancher members of Nebraska Farm Bureau. Agriculture Economics Tidbits will provide you with timely tidbits of economic information and policy analysis focused on Nebraska’s largest industry, agriculture, and its key players, Nebraska’s farmers and ranchers.  The newsletter will break down global and national economic trends and what they mean for Nebraska agriculture, stay abreast of latest market movements, and provide the latest results from Farm Bureau research on current policy issues like property taxes, school funding, farm programs and international trade—all with the goal of helping you maintain a viable farming or ranching operation.

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Agriculture Economic Tidbits is now providing easy-to-read charts which plot the weekly crop progress reports for Nebraska released by the USDA National Agricultural Statistics Services.  To see the latest report, click here

The Nebraska Department of Revenue announced the property tax credit on agricultural land in 2019 will amount to roughly $116 million statewide, or $2.52 per acre on average. Non-agland property will receive a credit equaling almost $159 million.

United States agriculture operates in a global marketplace and faces stiff competition in overseas markets. In some markets, the U.S. competes well and has secured sizable market shares. In others, stiff competition, the value of the dollar, and other non-market factors keep U.S. market shares low.

The Clayton Yeutter Institute of International Trade and Finance at the University of Nebraska-Lincoln in cooperation with the Nebraska Farm Bureau is presenting a one-day conference entitled “What’s on the Horizon for International Trade?”

“Jyske Bank, Denmark's third-largest bank, said recently that customers would now be able to take out a 10-year fixed-rate mortgage with an interest rate of -0.5%. Yes, you read that correctly. A bank in Denmark is offering borrowers the chance to take out mortgages at a negative interest rate, effectively meaning that it will pay customers to borrow money!” The Van Trump Report, August 21, 2019.

Agriculture Economic Tidbits is now providing easy-to-read charts which plot the weekly crop progress reports for Nebraska released by the USDA National Agricultural Statistics Services.  To see the latest report, click here

The Clayton Yeutter Institute of International Trade and Finance at the University of Nebraska-Lincoln in cooperation with the Nebraska Farm Bureau is presenting a one-day conference entitled “What’s on the Horizon for International Trade?” 

Nebraska remains one of the top states in the use of reduced and no-till tillage practices on farms. The 2017 Census of Agriculture showed that no-till cropland acres in the state equaled 10.3 million acres, or 46 percent of total cropland acres.

“The fact is meat alternatives snagged only $4.3 billion of the $900 billion-plus global meat market in 2018. Market analysts see mock meat sales rising 6.8% per year through 2023, to an arguably unimpressive $6.3 billion, even as real meat sales grow faster.” Alan Guebert, Farm and Food, Lincoln Journal Star, September 8, 2019.

Agriculture Economic Tidbits is now providing easy-to-read charts which plot the weekly crop progress reports for Nebraska released by the USDA National Agricultural Statistics Services.  To see the latest report, click here

Since the USDA released its August production estimates two weeks ago, the trade has largely turned its attention to predicting this year’s yields. The Pro Farmer Midwest Crop Tour was in Nebraska last week and reported a potential corn yield of 172.5 bushels per acre and an average soybean pod count of 1,210.8 pods.

The fire at the Tyson beef packing facility in Kansas and the subsequent movements for cattle and boxed beef prices along with soaring packer margins has brought about renewed attention on the competitiveness of cattle markets.

The USDA National Agricultural Statistics Service reports the average value of land and buildings in Nebraska increased 3.6 percent in 2019, or $100 per acre. The average land value in 2019 of $2,850 per acre is 9 percent below the 2014 peak of $3,120 per acre.

“When politics and economics collide, economics lose.” Ernie Goss, Creighton University, Jack MacAllister Chair in Regional Economics

Agriculture Economic Tidbits is now providing easy-to-read charts which plot the weekly crop progress reports for Nebraska released by the USDA National Agricultural Statistics Services.  To see the latest report, click here

On August 12 the USDA dumped a load of data regarding this year’s planted acres, estimated crop production, and prevented planting acres. For Nebraska, the National Agricultural Statistics Service (NASS) estimated 10 million acres of corn were planted; the average yield was forecast at 186 bushels per acre; and total production was pegged at 1.795 billion bushels, roughly the same as last year.

081919 CotM

Figure 1. Industrial Hemp Acres Planted, 2019

Friday, August 9, touched off a rough week for cattle markets and producers. A Tyson processing facility near Holcomb, Kansas, suffered a fire which took roughly 5% of the nation’s processing capacity out of service. Steven Koontz of Colorado State University was prescient a week ago when he wrote, “The impact of this event on fed cattle markets will be substantial.

The collapse of the Goshen/Gering-Ft. Laramie canal in July resulted in the loss of irrigation water for 104,000 irrigated acres in Nebraska and Wyoming. A joint analysis by University of Nebraska-Lincoln and the University of Wyoming estimates the collapse could have an $89 million economic impact for the Nebraska and Wyoming economies. UNL extension economist, and Scotts Bluff County Farm Bureau member, Jessica Groskopf, contributed to the study.

“Protectionism is yet another example of government being the disease for which it pretends to be the cure.” George Will, Protectionism a poison, not cure. Lincoln Journal Star. 5.30.19.

Agriculture Economic Tidbits is now providing easy-to-read charts which plot the weekly crop progress reports for Nebraska released by the USDA National Agricultural Statistics Services.  To see the latest report, click here

The repeated lyrics, “crimson and clover, over and over,” from the Tommy James hit song came to mind when seeing another researcher has found property taxes on farms and ranches in Nebraska are significantly higher compared to other states. Agricultural economist, David Widmar, used several measures to examine the relative burden of property taxes on farms between states in a recent blog. Not surprisingly, he found farm property taxes in Nebraska continue to rank high . . . over and over.

Drive along a Nebraska highway or county road during the winter months and one will see cattle grazing on corn stalks. The integration of Nebraska’s two largest agricultural sectors, corn and beef, has been shown to provide economic value for both sectors according to an economic assessment by professors in the Agricultural Economics, Agronomy, and Animal Science Departments at the University of Nebraska.

Ronald Reagan used to say that if the game Trivial Pursuit were designed by economists, it would have 100 questions and 3,000 answers. President Reagan’s quip is the title of a Tidbits feature called . . . “100 Questions and 3,000 Answers.”

“It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.” Murray N. Rothbard.

Agriculture Economic Tidbits is now providing easy-to-read charts which plot the weekly crop progress reports for Nebraska released by the USDA National Agricultural Statistics Services.  To see the latest report, click here

To no one’s surprise, the Federal Reserve Open Markets Committee voted last week to lower the federal funds interest rate by a quarter-point. The target range for the rate is now 2.0-2.25 percent. The reduction was the first since 2008. The surprise, if any, was that the reduction wasn’t more.

And, the title for the largest beef exporting country in the world, envelope please, goes to:  Brazil. U.S. exports of beef have been growing, up 15 percent in value in 2018, but Brazil last year provided close to 20 percent of total global beef exports according to the USDA Economic Research Service to lead the world. In comparison, the U.S. ranked fourth and represented 14 percent of the world’s exports. India and Australia rank second and third respectively.

Will Secor, a CoBank economist, projects operating margins for ethanol plants will remain weak for 2019. Sluggish ethanol demand, excess production capacity, and rising input cost will squeeze margins. As a result, Secor foresees some ethanol plants shutting down or idling production, most likely those with older technology or smaller plants located in areas with higher input costs.

“It’s worth mentioning, consumer debt, not counting mortgages, has climbed to $4 trillion, making it higher than its ever been even after adjusting for inflation. . . Consumers increasingly need it, companies increasingly can’t sell their goods without it, and the economy, which counts on consumer spending for more than two-thirds of GDP, would struggle without a plentiful supply of credit.” Kevin Van Trump, The Van Trump Report, August 5, 2019.