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.
Preliminary numbers from the University of Nebraska Department of Agricultural Economics' annual real estate survey show the average market value for agricultural land in Nebraska increased 6 percent over the past year (Figure 1). This marks the second consecutive year the survey reported higher land values—the average value was up 3 percent last year. The average land value this year is $2,895 per acre, 13 percent below the 2014 high of $3,315 per acre.
A webinar sponsored by Nebraska Farm Bureau on February 10, which focused on Nebraska’s agricultural economy, provided the opportunity to poll Nebraska producers on questions inquiring minds want to know—current financial conditions, planting intentions, and this year’s calf crop. Roughly 100 people participated on the webinar and the number of respondents ranged from 19-41 depending on the question. While the poll was non-scientific, it provided a peek into producers’ thinking in February entering the 2021 planting and calving seasons.
The USDA’s National Agricultural Statistics Service estimates the value of Nebraska’s 2020 crops is $11.9 billion, up 22 percent from 2019. The value of corn production is expected to total $7.61 billion, up 21 percent from the previous marketing year, and the value of soybean production is expected to be $3.18 billion, up 36 percent. The marketing year for both crops runs from September 1 to August 31. Nebraska’s average corn price is projected to be $0.73 per bushel higher compared to last year while the average soybean price is projected to be $2.53 per bushel higher.
Figure 5. Historial & Projected U.S. Export Shares
Source: USDA, Economic Research Service, USDA Agricultural Projections to 2030.
“Working with producers through the years, I’ve learned many of us are infected with a very costly disease. I call it egonomics. . . I’ve asked many producers why this is, and they usually respond they want their operation to be bigger so it will make more money. But I don’t really think that it’s at all. It’s all about self-worth.” Wesley Tucker, Business Basics: Want more cattle? Limit grazing cows, boost forage production and add stockers. BEEF Daily, March 10, 2021.
U.S. beef and veal exports in 2020 were down 2.3 percent compared to 2019. In comparison, U.S. beef imports were up 9.3 percent. The result—the U.S. had a trade deficit in beef where imports outpaced exports. In raw numbers, the U.S. imported 3.34 billion pounds and exported 2.96 billion pounds.
Trouble could be afoot for Nebraska corn exports to Mexico. On December 31, Mexico published a decree requiring the phase-out of the use of glyphosate and genetically modified (GMO) corn for human consumption. GMO corn is to be phased out no later than January 31, 2024.
The French farm ministry announced late last year it will give financial aid to farmers who agree to halt the use of glyphosate on their farms. The aid will consist of a tax credit of 2,500 euros ($3,030) to farmers who apply and agree to cease use of glyphosate in 2021 and 2022.
“...I’m a professional economist which means I only have to be right 50 percent of the time to keep my job.” Bruce Sherrick, Farmland Markets and Macroeconomic Conditions webinar, University of Illinois, Department of Agricultural and Consumer Economics, December 15, 2020.
Soil health, carbon sequestration, regenerative agriculture, sustainability—all terms being bandied about with increasing frequency regarding agriculture and its role in combating climate change. Some of the increased focus is due to the election of President Biden and his priority of addressing climate change.
A few years ago, a farmer testifying at the Legislature on a property tax bill commented that property taxes aren’t paid with dirt. His point being it takes revenue generated from the land to pay property taxes and ownership of land doesn’t, in and of itself, demonstrate an ability to pay taxes.
“A recent analysis by one of us found that Nebraska has been subject to the fourth-highest increase in the burden of federal regulation since 1997. These costs hit low-income Nebraskans hardest, leading to higher prices for goods, and an estimated 850 fewer jobs each year, 34,000 more people living in poverty, and a 4% increase in income inequality in the state.” Seize chance for regulation reform, James Broughel and Colin O’Reill, Midland Voices, Omaha World Herald, February 21, 2021.
Nebraska farmers have until March 15 to make their 2021 farm bill program decisions at their local USDA Farm Service Agency (FSA) offices. The decision concerns farm program coverage for the 2021 crop with payments to be received in the fall of 2022.
Taxes levied on agricultural land in 2020 equaled $1.149 billion, off $23 million compared to 2019, or 2 percent. This marks the third consecutive year taxes on agricultural land were off compared to the previous year, primarily due to declines in the market value of land. Taxes levied on farm buildings and farm sites increased 9 percent or $4 million. Combined, taxes levied on agricultural real property fell $19 million, or 1.5 percent compared to 2019.
Resiliency Through Disruption, a report prepared by Ernst and Young and Purdue University for AgriNovus Indiana, examined the impact of the COVID-19 pandemic on Indiana agriculture as well as the future of food and agriculture. AgriNovus Indiana is part of a public and private sector partnership to fuel growth in Indiana’s bioscience industry. Losses to production agriculture in Indiana from the COVID-19 pandemic was estimated at $500 million. Perhaps more importantly for Nebraska agriculture, the report discusses the future of agriculture and provides recommendations for improved resiliency in the sector in light of the pandemic.
Nebraska's number of farms and ranches in 2020 was 45,500, down 200 compared to 2019 according to according to USDA's National Agricultural Statistics Service. Land in farms and ranches totaled 44.9 million acres, unchanged from 2019. The average size of a operation equaled 987 acres, up 5 acres from the year prior.
“...EV [electric vehicle] sales should increase roughly 20-fold from 2.2 million in 2020 to 40 million units in 2025.” Disruptive Innovation 2021: These 15 big ideas are most likely to change the world by Vala Afshar, ZDNet, January 29, 2021
Exports got the hits U.S agriculture needed in the bottom of the ninth inning last year to capture a trade surplus for the 61st consecutive year. Through September of last year, U.S. agriculture was running a trade deficit with the rest-of-the-world of $2.0 billion. Exports were off 0.78 percent and imports were up 2.3 percent. However, a fourth quarter export surge provided the base clearing hit to close out another trade surplus equal to $9.8 billion, up from the $5.7 billion in 2019. The last time the U.S. had a trade deficit in agricultural goods was 1959, the year Alaska and Hawaii were admitted as states to the union.
Investment in agriculture and food technology startups continued apace according to AgFunder. AgFunder, a venture capital firm based in Silicon Valley whose mission is to invest in technologies to transform food and agriculture systems, developed a list of the top 20 highest-funded agrifoodtech startups in 2020. Table 1 contains U.S. based companies on the list with the company’s ranking in terms of dollars raised and the amount raised. Many of the startups are familiar names (i.e. Impossible Foods, Farmer Business Network, DoorDash). Others on the list not so much. Collectively the startups represent a range of different spaces in agriculture technology from alternative proteins, biotechnology, grocery and food delivery, farm inputs, sensors, and networking.
Last week’s story in Tidbits on the new Nebraska refundable income tax credit for property taxes paid to schools generated several questions from readers on how to properly claim the credit. In response, Nebraska Farm Bureau prepared a webpage with information on the credit and steps on how to claim the credit. The guide can be found at: https://www.nefb.org/taxcredit. The guide also contains links to additional information and forms from the Nebraska Department of Revenue.
“When the temperature registers zero, does that mean there isn’t a temperature? Because when there is zero of something, there’s nothing.” Jay Rempe pondering Nebraska’s recent bout with frigid weather.
There’s a new wrinkle this year for taxpayers who pay property taxes to schools and file Nebraska income taxes—a refundable income tax credit for property taxes paid to schools. The credit was created with the passage of LB 1107 last year which dedicated $125 million towards the program.
After a volatile 2020, questions abound about what 2021 will hold for farmers, ranchers, and the agriculture economy. Nebraska Farm Bureau will provide perspective on what Farm Bureau members will want to keep an eye on in the new year during the Nebraska Farm Bureau’s “Agriculture Outlook 2021” webinar Wednesday, Feb. 10 at Noon (CT). Don’t miss out! Register today! REGISTER HERE
Beef cows which calved totaled 1.90 million head in Nebraska on Jan. 1, down 1 percent compared to 2020 according to USDA National Agricultural Statistics Service (Figure 2). Nebraska remains fourth among states in the number of beef cows following Texas, Oklahoma, and Missouri.
The University of Nebraska-Lincoln Department of Agricultural Economics and crop specialists released crop and pasture budgets for 2021. The budgets project the cash costs for dryland and irrigated corn production will be lower in 2021.
“Bandits loot villages in northern and central Nigeria, and kidnap for ransom. Many farmers have abandoned their homes and crops. ‘We will not have food sufficiency because people are afraid of going to their farms,’ says the head of a farmers’ association.” Nigeria, death in a rice field, The Economist, December 5th, 2020.
A story in Tidbits late last year explored the acres devoted to field crops in Nebraska since 1993. Most people, if asked, would probably say acres devoted to crops in the state have increased over time. An understandable response given the expansion of ethanol production and growing exports since the turn of the century.
Two measures have been introduced in this year’s Legislature, both on behalf of Governor Ricketts, to limit the growth in property taxes levied by local governments to 3 percent annually. The measures, LR 22CA introduced by Sen. Lou Ann Linehan, and LB 408 introduced by Sen. Tom Briese, differ only in that Linehan’s measure would place the limit in the state constitution.