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.
“If all we want are jobs, we can create any number—for example, have people dig holes and then fill them up again, or perform other useless tasks. Work is sometimes its own reward. Mostly, however, it is the price we pay to get the things we want. Our real objective is not just jobs, but productive jobs—jobs that will mean more goods and services to consume.” Milton Friedman.
Two developments on the trade front can be celebrated by Nebraska agriculture. First, Democrats in Congress, the Trump Administration, and Mexico have agreed on provisions to include in the United States-Mexico-Canada Agreement (USMCA) which should pave the way for passage.
U.S. exports of petroleum have exceeded imports for the first time in 50 years. The U.S. Energy Information Agency (EIA) estimates that the United States exported 140,000 barrels/day more total crude oil and petroleum products in September than it imported. If confirmed, it would be the first time the United States exported more petroleum than it imported since EIA records began in 1949.
“People have been generally moving out of cities and rural areas, and into suburbs, as suburbs have seen net increases in migration of at least 2 million since 1987. But this year, for the first time since 1998, rural areas drew more residents from cities and suburbs than they lost.” Americans are moving less than ever before, Jeff Andrews, Curbed, Nov. 22, 2019
An astute reader caught an error in last week’s story concerning USDA beef market projections. The story mistakenly reported this year’s production, imports and exports in “million” pounds, when the figures should have been reported in “billion” pounds. The corrected language is:
Figure 2. Share of Disposable Personal Income Spent on Food in U.S.
The American Farm Bureau Federation’s 34th annual survey of traditional food items found on the Thanksgiving Day dinner table indicates the average cost of this year’s feast for ten people is $48.91, a one cent increase from last year. That is less than $5.00 per person.
“For example, while farmers are expected and sometimes observed to adapt to the shifting long-run climate pattern, Dell, Jones, and Olken (2014) argue that certain governmental agricultural support programs (such as subsidized crop insurance program) could have reduced farmers’ incentives to adapt. Therefore, there could be a tradeoff between reducing farmers’ revenue risk and increasing agricultural productivity.” Sun Ling Wang, Eldon Ball, Richard Nehring, Ryan Williams, and Truong Chau; Impacts of Climate Change and Extreme Weather on U.S. Agricultural Productivity: Evidence and Projection; Working Paper 23533; National Bureau of Economic Research.
Tidbits does not include links to crop progress charts this week due to the Veterans Day holiday. Thanks to those who serve or have served in our nation’s armed forces. “Never was so much owed by so many to so few.”—Winston Churchill.
Friday’s USDA crop production estimates project Nebraska corn production will equal 1.77 billion bushels, down 1 percent compared to last year. The average corn yield for Nebraska is estimated at 182 bushels per acre, off 10 bushels from last year.
Links with California dominate Nebraska food flows according to research performed by researchers with the University of Illinois and Kansas State University. The analysis examined food flows between counties and Freight Analysis Framework (FAF) zones in the United States.
Another interesting aspect of the Xiaowen Lin et al. study were the estimates of corn flows between counties which were part of the analysis. Figure 2 illustrates corn flows between counties in several Midwest and Plains states including Nebraska and was taken from the study.
Come December, the world may be losing its forum for resolving trade disputes with the collapse of the World Trade Organization’s (WTO) dispute settlement system. Next month, two appellant judges will fulfill their terms on the appellant body and must retire.