Harvesting the Headlines: Week Ending March 10
Between the 24/7 demands of running an agricultural operation and the blinding pace of our world today, there is little time to sift through all the headlines. The good news is that you no longer have to!
Our goal is to point you to some of the most important headlines in agriculture, so you can stay informed on the forces shaping your livelihoods.
To save you time, here are the week's top links and news items:
1. From FBN®: Why Did National Farmland Values Increase in 2022?
The FBN Data Science delivers data-driven insights on trends related to farmland values.
The real mortgage rate is one of the best predictors of farmland value change.
Since interest rates were low and inflation high for a big part of 2022, the real mortgage rate remained negative.
On average, the farming sector is in an excellent financial position.
The debt-to-asset ratio is low, indicating that farmers have used the high net income period to build equipment and financial reserves.
2. USDA Precision Technology Adoption Report Highlights and Analysis
This link provides an excellent overview of the recent USDA report, Precision Agriculture in the Digital Era: Recent Adoption on U.S. Farms.
Most forms of digital technology have been slowly adopted in the agricultural sector.
However, biotechnology has moved at lightning speed in adoption terms.
A Hierarchy of Farmer Technology Adoption is developed to show how successfully a technology will be adopted.
Farmers slow to adopt technology are typically correlated with smaller farm sizes, lower crop yields, less use of technical or consulting services
A number of factors have elevated commodity prices in recent years, and this link looks at the tight grain stocks situation.
Corn, soybean, and wheat stocks are all below the long-run average in the US.
The situation is similar on a global scale.
Any production concerns in 2023 could trigger a dramatic price response.
Accordingly, all crops will be bidding for acres going into 2023.
4. Early herd rebuilding could happen through the bred cow market
The USDA Cattle Inventory report shows that feeder cattle supplies will be reduced nationally in 2023.
Expected profit margins in the current year will help determine how quickly the herd can be rebuilt.
The quickest way for these producers to increase the feeder cattle supply is through the addition of bred cows or bred heifers.
Higher feeder cattle prices create incentives for more calves to be brought to market and bred cows are the quickest way to do so.
This link also provides a chart for premiums/discounts for bred cows based on expected feeder cattle and corn prices.
5. The Use of Climate Information in Midwest Agriculture: Results from a Farmer Survey
This link examines how farmers utilize weather/climate information in their decision-making processes.
Most farmers use the short-term forecast in farming decisions, especially when it comes to planting and spraying time, fertilizer application, and hay management.
The use of longer-term forecasts are utilized less frequently. The most common use of long-term forecasts is for marketing strategy.
50% of farmers rely on their own experience when making decisions based on climate/weather forecasts.
The other half uses advice from the public sector (University extension) and/or the private sector (Ag inputs supplies, farm advisors, and neighbors).
Get in touch
If you have any links you'd like to share or have any questions, please contact Travis Carlstrom, Sr. Ag Credit Analyst at FBN.
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