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February' 2014

USDA Report Lowers Corn Supply

On February 10, USDA released the latest World Agriculture Supply and Demand Estimates (WASDE) Report, which showed slight decrease in the expected U.S. corn ending stocks for 2013-14, compared to the January estimates. The projected 2013-14 corn ending stocks are now estimated at 1.48 billion bushels, as compared to 1.63 billion bushels in the January Report. By comparison, corn ending stocks were only 821 million bushels at the end of the 2012-13 marketing year, and 989 million bushels at the end of the 2011-12 marketing year. The all important corn “stocks-to-use” ratio for 2013-14 is now estimated to be near 11.1 percent by the end of the current marketing year, as compared to a stocks-to-use ratio of only 7.4 percent for the 2012-13 marketing year. [ read more ... ]

 

Passage of the New Farm Bill

The long-awaited new Farm Bill finally passed the U.S. House on Wednesday, January 29, by a vote of 251-166. The legislation is likely to pass the U.S. Senate in the coming days, and will be signed into law by President Obama shortly after that. The new Farm Bill will reduce overall Federal spending, will reduce total CRP acreage, and will make some significant changes to farm commodity programs. The new Farm Bill will govern Federal farm programs for the next five years (2014-2018), and commodity programs will be implemented for the 2014 crop year. [ read more ... ]

 

Farm Size Comparisons

Ask many farmers or ag professionals, and probably anyone with any knowledge of crop farming, whether larger farm operations have a lower cost of production, and they would probably say “YES”. However, the farm management data from Minnesota and other States does not support the assumption that average costs of production per acre get lower as crop farm sizes gets larger. Interestingly, in some cases it is just the opposite, and in most situations there is very little correlation to farm size. [ read more ... ]

 

January 10 USDA Reports

As expected, the USDA Crop Production Report released on January 10 indicates that the total U.S. corn production for 2013 will increase significantly, and the 2013 soybean production will increase moderately, as compared to production levels in 2012. The final national average yields per acre for corn and soybeans in 2013 are also expected be significantly higher than the drought-reduced 2012 yields. Following are some highlights of the latest USDA Crop Report, as well as the latest Supply and Demand (WADSE) Report : [ read more ... ]

 

2014 Farm Management Strategies

As we look ahead to 2014, crop revenues are likely to be significantly reduced compared to 2013 revenue levels. There is likely to be some moderation in 2014 crop input costs, due to lower fertilizer costs; however, land rental rates will likely remain fairly high, which could add more risk to 2014 crop production. The profit margins in the livestock sector look improved for 2014, due to the moderation in feed costs that is expected. Credit availability for agriculture should remain good for farm businesses that are on a solid financial base; however, credit could get tighter for farm businesses that are in a “higher-risk” financial position. [ read more ... ]