Welcome to Agriculture Economic Tidbits, a new weekly e-newsletter for farmer and rancher members of Nebraska Farm Bureau Federation. The 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.
Agriculture Economic Tidbits will be emailed each Monday. As a Farm Bureau member, you will receive a copy for the next three weeks. If you like what you see, and want to continue receiving Agriculture Economic Tidbits, simply click here:
And if you have any questions or comments on Agriculture Economic Tidbits, please email Jay Rempe.
Conventional meat will supply just 40 percent of global meat consumption by 2040 predicts AT Kearney, a global management consulting firm. How Will Cultured Meat and Meat Alternatives Disrupt the Agricultural and Food Industry? AT Kearney, 2018.
Crop progress charts are not available this week due to extenuating circumstances—a Nebraska Farm Bureau staff educational tour. Updated charts will be available next week.
Every so often a topic discussed in Tidbits will strike a chord with readers. Last week was such an occasion. Several readers wrote to comment on the story, “When 50 Cents Turns Into $1 Billion.” The story discussed the potential impacts to Nebraska’s economy of the 50-cent increase in the estimated farm price of corn in the June World Supply and Demand Estimates (WASDE).
The USDA National Agricultural Statistics Service reported farm and ranch operators in Kansas, Nebraska, North Dakota, and South Dakota employed 30,000 workers in April, down 6 percent from the previous year. However, the average wage paid this year, $15.58 per hour, was 6 percent greater than the average wage paid last year. Farm workers were paid an average of $16.13 per hour while livestock workers were paid $12.42 per hour.
“Veblen argued that consumption is not merely about satisfying needs, but is also used to signal status and prestige. The priciest cars may offer more nifty features and a smoother ride than a cheaper marque, but the vast difference is price is not primarily down to such advantages. Rather, the buyer is paying such cars’ value as a status symbol, which derives from the fact that very few people can afford one . . . These luxury items defy normal economic logic. In the mass market, productivity boosting innovations that allow firms to sell better products at lower prices are a route to success. For producers of conspicuous-consumption items, such cost-cutting does not conquer the market but destroys it.” Free exchange: enough is never enough, The Economist, June 8th, 2019.
When people think of the USDA, thoughts of farm or conservation programs usually come to mind first. It’s sometimes overlooked that the USDA administers fifteen food and nutrition assistance program which for over two-thirds of its annual spending.
“The curious mind embraces science; the gifted and sensitive, the arts; the practical, business; the leftover becomes an economist.” Nassim Nicholas Taleb
Agriculture producers’ sentiment regarding the agricultural economy as measured by the Purdue University/CME Group Ag Economy Barometer plummeted over the past two months. The latest nationwide survey of 400 agricultural producers yielded a barometer reading of 101, 14 points below the previous month and the lowest reading since October 2016, the month before the election of President Trump.
An analysis by Jayson Lusk, head of the Department of Agricultural Economics at Purdue University, found that consumer spending on beef has declined over time. Using data from the Consumer Expenditure Survey from the Bureau of Labor Statistics on household spending,
Nebraska’s per capita real gross domestic product (GDP) in 2018 equaled $58,141 and ranked 16th highest amongst the 50 states according to an analysis by SSTI of Bureau of Economic Analysis data. SSTI is a national nonprofit organization which offers information on the economy.
“Capitalists believe that market signals, not political appointees with political agendas, give satisfactory encouragement for reasonable commercial behaviors.” George Will, Protectionism a poison, not cure. Lincoln Journal Star. 5.30.19.
No doubt expletives have been voiced by folks involved in Nebraska agriculture regarding this year’s weather. Weather is a constant influence on production agriculture, but this year is one for the record books. Farmers’ struggles in getting crops planted have been well documented. Last week’s NASS crop progress report (as of May 26) indicated 81 percent of the state’s corn acres and 56 percent of the state’s soybean acres were planted.
For the first time in 20 years, property taxes levied on agricultural land statewide declined year-to-year. Taxes levied in 2018, $1.183 billion, were 1.5 percent or $17.5 million less than that levied in 2017. The decline marks the first time since 1998 that taxes on agricultural land have declined and only the fourth time over the past 38 years (1986, 1987, 1990, & 1998).
President Trump has been quoted as stating the federal government is collecting “hundreds of billions of dollars” in tariff revenue. The website Shopify defines a tariff as “a tax imposed by a government on goods and services imported from other countries to increase the price and make imports less desirable . . .” Tariffs are imposed by the federal government and the tax revenues flow to the federal treasury.
“We should never lose sight of the fact that the job of the market is to disseminate the information at hand and attempt to come up with a price that reflects what happens on a global scale.” Dan Hueber, thehueberreport, May 31, 2019.
Monday’s crop progress reports showed 70 percent of Nebraska’s estimated corn acres and 40 percent of the estimated soybean acres were planted as of May 20. In comparison, the 5-year planting progress averages are 86 percent for corn and 54 percent for soybeans. In March the USDA estimated 9.7 million acres of corn would be planted and 5.4 million acres of soybeans in Nebraska.
In Nebraska, for crop insurance purposes, the final planting date for corn in all counties is May 25 and the final planting date for soybeans is June 10. Farmers may be eligible for a prevented planting payment if acres have not been planted due to an insured cause of loss by the final planting date. Prevented planting will provide coverage equal to 55 percent of the original production guarantee in the crop insurance policy.
A recent Agricultural Economic Insights blog highlighted the impacts of delayed planting on national average yields. The article noted that there were only four years since 1980 in which the corn planting progress nationally was less than the progress made this year at a similar time in the planting season (week of May 13).