Chapter 12 Bankruptcies Lower Across Farm Country
November 16, 2018 |
Projections for the third-lowest net farm income in the last decade, record nominal agricultural debt, rising debt-to-asset ratios and interest rates, and continued headwinds for agricultural commodity prices had many anticipating an increase in farm bankruptcies in 2018. However, that is not currently the case.
Caseload statistics from the United States Courts indicate that for the 2018 fiscal year, which ended Sept. 30, there were 468 Chapter 12 bankruptcy filings, down 8 percent, or 40 filings, from the prior year. Filings in fiscal year 2018 were down from prior-year levels but were approximately 25 percent higher than in 2014.
Thanksgiving Dinner Cost Continues to Decline
November 15, 2018 |
American Farm Bureau Federation’s 33rd annual price survey of the classic Thanksgiving dinner – including turkey, stuffing, pumpkin pie and all the fixings -- revealed an average cost for a family of 10 was $48.90, less than $5 per person and down less than 1 percent from prior-year levels.
Pace of Harvest and Winter Wheat Planting Remains Below Five-Year Average
November 14, 2018 |
Harvest is winding down, as USDA’s Nov. 13 Crop Progress report revealed the U.S. corn harvest is 84 percent complete. The 8-percentage point increase from last week’s 76 percent complete is up from the previous year, representing a 3-percentage point increase from last year’s 81 percent complete.
Reviewing Dairy Revenue Protection Participation
Nearly 3 Billion Pounds Covered in First Month
November 13, 2018 |
RMA’s Summary of Business report indicates that during the first month of availability 673 policies and more than 200 endorsements were purchased by dairy farmers (endorsements are quarters covered on a policy). These endorsements represented 2.7 billion pounds of milk covered in the first month. On average, each Dairy-RP endorsement is covering 13 million pounds, or slightly more than 4.2 million pounds per month of the quarter. Mostly all endorsements have been at the maximum 95 percent coverage level. Anecdotally, a majority of the endorsements sold were for the first quarter of 2019, signaling that Dairy-RP policies currently represent approximately 5 percent of the U.S. expected milk production during the first quarter of 2019, i.e., 0.05=2.7÷(221×0.25).
Tensions With China Take A Bite Out of U.S. Soybean Acreage
2019 Soybean Plantings Expected to Fall 6.6 Million Acres
November 8, 2018 |
For the 2019 crop year, USDA projects soybean planted acreage will decline by 6.6 million acres, dropping from a record 89.1 million acres planted in 2018 to 82.5 million acres. If realized, this would be the third-largest acreage decline of all time and the largest year-over-year decline in soybean plantings since the beginning of the Renewable Fuels era in 2007. The decline in soybean acreage is anticipated given the slow pace of soybean exports, the dramatic decline in Chinese purchases, expectations for a nearly billion-bushel-carryout and projections for decade-low soybean marketing year average prices.
Jobs Report Indicates Both a Strong Economy and Potential Future Inflation
November 5, 2018 |
There was very little not to like in this month’s jobs report. The Bureau of Labor Statistics pegged job growth at a cool 250,000 new slots. With labor force participation up by 0.2 percent to 62.9 percent, this left the unemployment rate at 3.7 percent. Never forget that changes in labor force participation can have as much of an impact on the unemployment rate as job growth does.
Beyond the headline numbers, there were several essentially unchanged figures in the household survey data. Long-term unemployed numbers – those out of a job for 27 weeks or more – stayed at 1.4 million, or 22.5 percent of the total unemployed. Similarly, there are still 4.6 million people who are involuntarily in part-time positions. People who are marginally linked to the job market, but who did not look for work in the four-week period prior to the survey continue to sit at 1.5 million, almost identical to the figures reported a year earlier. A little deeper dive into this figure shows 506,000 people who are not looking for work because they simply believe there are no jobs that fit their needs/qualifications. Fully two-thirds of the 1.5 million individuals who did not look for work in the four-week period before the survey (984,000 people) did so because of school attendance or other family responsibilities.
Reviewing 2018 Crop Insurance Prices
2018 Harvest Prices Now Available
November 1, 2018 |
At the beginning of November, USDA’s Risk Management Agency announced the harvest prices for corn at $3.68 per bushel, cotton at 77 cents per pound and soybeans at $8.60 per bushel. For corn, the harvest price was 28 cents per bushel below the spring price, marking the sixth consecutive year that harvest prices have been below the spring prices established in February. For cotton, the harvest price was 1 cent per pound above the spring price and the highest harvest price since 2013. For soybeans, the harvest price was down $1.56 per bushel---the largest drop in harvest price since 2014. Spring and harvest prices are presented in Figure 1. For corn and soybeans, the decline in harvest prices was anticipated given projections for the second-largest corn crop, a record soybean crop, and the headwinds agriculture is facing in export markets.
African Swine Fever and China: Part II
October 30, 2018 |
China’s ongoing issues with African Swine Fever continue as the virus spreads further throughout the country.
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