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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InvestingAnswers defines price discovery as “the act of determining the proper price . . . by studying market supply and demand and other factors. . . [it] also depends on the number, size, location, and competitiveness of the buyers and sellers.” Price discovery in fed cattle markets is a growing concern for many participants.

Figure 2. Crude Oil and Ethanol Inputs (To Gasoline Demand)

Crude Oil and Ethenol Inputs

Source: USDA, Economic Research Service

Exports represent a significant market for U.S. agricultural products. For Nebraska, the value of exports each year equals roughly 30 percent of the state’s total agricultural receipts. Agricultural exports benefit not only farmers and ranchers but spills over into other sectors of the economy as well.

Easy-to-read charts which plot the weekly crop progress reports for Nebraska released by the USDA National Agricultural Statistics can be found here.

“If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small.” Jeff Bezos, CEO of Amazon, on a projected $4 billion of coronavirus-related expenses in the second quarter.

First, the bad news… the latest projections from the Bureau of Business Research (BBR) at the University of Nebraska-Lincoln (UNL) show net farm income in Nebraska for 2020 will decline 23 percent compared to last year.

The CARES Act directed $9.5 billion to the USDA for assistance to agricultural producers and replenished to coffers of the Commodity Credit Corporation with $14 billion.

Tax Equity and Educational Opportunities Support Act (TEEOSA) aid to Nebraska’s 244 school districts will equal $1.05 billion in school year 2020-21, $13 million less compared to this school year.

Easy-to-read charts which plot the weekly crop progress reports for Nebraska released by the USDA National Agricultural Statistics can be found here.

Farm Service Agency records show there are 33.8 base acres of peanuts certified in Antelope County.

U.S. agriculture has built a tremendously efficient food supply chain starting with farmers and ranchers and ending with retailers and consumers. When it runs smoothly, consumers can go to a store, restaurant, or even online, and purchase the variety and quantity of food they desire at an affordable cost.

An economic recession is defined as at least two consecutive quarters of negative economic growth. Given last week’s first quarter growth estimate from the Bureau of Economic Analysis (BEA), it appears the U.S. economy will enter a recession in 2020.

Abnormally dry conditions have crept back into Nebraska. The state entered 2019 with a colorless drought map and it largely remained that way with only an occasional spot of dryness popping up.

Easy-to-read charts which plot the weekly crop progress reports for Nebraska released by the USDA National Agricultural Statistics can be found here.

“JPMorgan Chase, the country’s largest bank, said the credit-card transaction volumes at supermarkets in March were twice those in March 2019.” Dispatch from the front, The Economist, April 18th, 2020.

Preliminary estimates released by the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri showed U.S. net farm income will decline $20 billion in 2020, or 17 percent compared to 2019, primarily due to COVID-19 impacts.

Nebraska leads the nation in acres irrigated with groundwater with over 8 million acres. Nebraska cities, villages, and industrial users also rely on groundwater resources. Monitoring the health of the state’s groundwater resources is critical.

Recent price declines in cattle markets have prompted questions concerning the role cattle and beef imports might be playing, if any, in the declines. This week’s Tidbits will tackle cattle imports.

Easy-to-read charts which plot the weekly crop progress reports for Nebraska released by the USDA National Agricultural Statistics can be found here.

“This is stunning as it basically says that a barrel of oil earlier this week was effectively cheaper than it was in 1870. A period over which US inflation has risen +2870% and the S&P 500 +31746505% in total return terms,” Analysts Jim Reid and Nick Burns quoted in the Van Trump Report, April 23, 2020.

Farmers are venturing into fields to plant this week. And while most planting decisions have been made, relative changes between the prices of soybeans and corn over the past few weeks have led some farmers to rethink their planting intentions.

April COM Weekly

Source: Daily Livestock Report, Steiner Consulting Group, Vol. 18, No. 76, April 20, 2020

As the economic costs of social distancing and other measures taken to “flatten the curve” for the COVID-19 outbreak become more apparent, people are asking whether the efforts are worth it. Do the benefits of flattening the curve exceed the resulting economic costs?

“Or , maybe, history, like life, is just one damn thing after another.” Jonah Goldberg, Suicide of the West, Crown Forum, 2018.

While most planting decisions have likely been made, relative changes between the prices of soybeans and corn over the past month have led some farmers to rethink their planting intentions. The USDA NASS projected Nebraska farmers would plant 10.5 million acres of corn and 5.1 million acres of soybeans.

Livestock prices are sensitive to the level of capacity utilization in the beef and pork processing sectors. Agricultural economists at Kansas State and Iowa State Universities found that livestock prices are reduced the higher the utilization of capacity.

“Well, Jane, it just goes to show you. It's always something. If it’s not one thing, it’s another.” Roseanne Rosannadanna, Saturday Night Live, 1980.

The unknowns and uncertainties regarding the ultimate economic impacts of the COVID-19 outbreak on Nebraska agriculture remain. Everyday effects reveal themselves. As such, Tidbits will continue to offer updates on the influences of the pandemic on Nebraska agriculture as they unfold.

Nebraska Farm Bureau has created a webpage with information for farmers, ranchers, and others in agriculture on COVID-19.