U.S. Agricultural Projections to 2032

by: Chris Zoller, Extension Educator, ANR in Tuscarawas County

The United States Department of Agriculture (USDA) released its Agricultural Projections to 2032 report in mid-February.  This article will highlight the crop portion of the report.  The full report is available here: https://www.ers.usda.gov/webdocs/outlooks/105853/oce-2023-01.pdf?v=1029.

This report is based on data available as of October 2022 and is made using several assumptions.  These include, but are not limited to, macroeconomic factors, a continuation of the 2018 Farm Bill, normal weather, and several others.  It is not to be considered a forecast.  Rather, the report is to be used as a baseline.

U.S. Crops

The figure below shows prices of corn, soybeans, wheat, and cotton for the period 2002 – 2032.  Corn prices are expected to fall from the present levels to $5.70 per bushel in 2023/2024 to 2026/2027 to $4.30 per bushel in 2032/2033.  Any growth in corn demand is expected to come from feed and residual use, primarily from demand to feed beef, pork, and poultry.

Baseline projections for soybeans are like corn.  Soybean prices will drop from their current highs to settle at $13.00 per bushel in 2023/2024.  This downward trend is expected to continue until settling at $10.30 per bushel in the 2032/2033 marketing year.  Expect modest increases in soybean crush to keep pace with soybean oil and meal demands.

Wheat, like corn and soybeans, is expected to decline in price over the projection period.  Wheat is projected to fall from a high of $9.20 in 2022/2023 to $5.70 per bushel by the end of the projection period.

 

Planted Acres

The Baseline projection from USDA shows relatively no change in planted area of the eight major crops (corn, soybeans, wheat, barley, cotton, oats, rice, and sorghum).  The figure below demonstrates planted area from 2002 – 2032.  Rising yields of corn, soybeans, and wheat will compensate for steady or declining acres planted.

Feed and Residual, Ethanol, & Exports

The figure below projections for grains used for feed and residuals, ethanol, and the export market.  Feed and residual and exports are expected to see the greatest increases, with ethanol use projected to remain level.

 

Planning

As the report outlines, these projections are based on several factors that likely will change.  Some are within your control, while many are not.  Let’s assume the price projections, for instance, are correct.  Can you remain or become successful at these prices?  What implications do these projections have for your farm business?  What can you do to prepare?

Consider the following suggestions:

Managing a successful farm business is no easy task.  However, there are many people, resources, and tools to help you chart a course for long-term success.  I encourage you to

Please Participate! Using Data-Driven Knowledge For Profitable Soybean Management Systems

By: Dr Laura Lindsey

Help us help you grow more profitable soybeans through the power of data science. Soybean agronomists are developing an app to help you make decisions in real time. The more data we collect, the more accurate the tool will be. (And…the more data we have from Ohio, the more applicable the tool will be to our state!) The app will allow growers to drop a pin in a field, enter input variables, and receive crop management decision help directly and through online scouting tools such as Sporecaster and Tarspotter.

This is what we are asking from you:

This project is funded by the North Central Soybean Research Program and led by Dr. Shawn Conley at University of Wisconsin- Madison and Dr. Paul Esker at Penn State University. All data we receive will be treated with confidentiality.

 

 

Ohio Land Values and Cash Rents Analysis

By: PhD student Xiaoyi Fang and Professor Ani Katchova, Farm Income Enhancement Chair, in the Department of Agricultural, Environmental, and Development Economics (AEDE), and Barry Ward, Leader, Production Business Management, Director, OSU Income Tax Schools, OSU Extension, Agriculture & Natural Resources, The Ohio State University

Ohio and the US experienced increases in real land values and cash rents in 2022 that surpassed levels last seen in 1998. Ohio’s cropland value reached its highest level at $7,550 in 2022, which is $2,500 above the national average, and ranks Ohio as No. 11 among all states in terms of highest cropland values. Ohio cropland cash rent increased from $160 in 2021 to $170 in 2022, after adjusting for inflation.  Despite increasing land values and cash rents, the rate of return on both Ohio cropland have fluctuated between 2.25% and 3.4% since 1998, reaching their lowest point in 2022.  Interest rates have generally trended downwards, reaching a low point in 2020 before rebounding in 2022. Using the 10-year Constant Maturity Treasury (CMT) rate for the calculation, the capitalized land values in Ohio were lower than market land values in 2022.

Link to the report: https://aede.osu.edu/sites/aede/files/publication_files/OhioLandValues2023.pdf

Using Quicken for Farm Record Keeping Workshop Slated for Feb 21 & 28

By Grant Davis, Champaign County ANR Educator

2022 Quicken Training Flyer

As we have moved into the new year, and tax season is quickly approaching, you might be looking to re-evaluate how you keep records for your farming operation. Maybe you have thought about using a software program like Quicken® but think it won’t work for a farm business, or just would like to see how it works before making the commitment of purchasing. Champaign County Extension will be hosting a short series on using Quicken® for Farm Record Keeping on February 21, and 28, at the Champaign Community Center Auditorium from 6 to 8:30pm. Participants will learn about Quicken® using an OSU Computer Lab provided during the workshop with Quicken® software installed. Or, if you already are using Quicken® you are welcome to bring your own computer. A workshop manual/home reference will be provided. Registration is $50.00 per farm business (Maximum 2 people per farm).

Space is limited to 10 workstations.

For more information or to register visit: www.go.osu.edu/quickenfarm

or email Grant Davis at davis.1902@osu.edu

Coffee & Grain Webinar Recap- Tight Supply Drives High Commodity Prices

On Monday morning’s Coffee and Grain Zoom, Dr. Seungki Lee (Assistant Professor in the Department of Agricultural, Environmental and Development Economics) discussed  the grain market outlook and the new crop prospects based on the USDA February World Agricultural Supply and Demand Estimates (WASDE) report. In all three major crops – corn, soybean, and wheat, strong prices are projected in the 2022/2023 market mainly due to the tight supply. Additionally, Brazil was singled out as its production can swing both the 2022/2023 and 2023/2024 commodity markets.

Click here to read Dr. Lee’s Summary Report

Farm Sector Profits Expected to Decline in 2023

By: Chris Zoller, Extension Educator -ANR in Tuscarawas County, Mike Estadt, Extension Educator- ANR in Pickaway County and David Marrison, Field Specialist -Farm Management

Forecast

U.S. net cash farm income (NCFI) is calculated by subtracting cash expenses from cash income, and the USDA Economic Research Service (USDA ERS) is predicting a decrease of $44.7 billion in 2023.  If realized, this represents a 22.9 percent drop from the forecast record high of $195.3 billion in 2022.  Net farm income (NFI) is a measure of farm profitability that includes changes in inventories, depreciation, and gross imputed rental income.  USDA ERS projects NFI to decrease 18.2 percent or $30.5 billion in 2023.  NFI reached $167.3 billion in 2022, the highest level since 1973 when adjusted for inflation.  While NCFI and NFI are expected to decline when compared to 2022, both are forecast to remain above their 20-year averages in 2023.

 

Why the Decline?

USDA ERS bases these declines on three factors: (1) farm commodity prices are projected to drop seven percent in 2023 compared to 2022, (2) a 1.3 percent increase in production expenses, and (3) an anticipated 36.2 percent decline in direct Government payments.

After 2020’s record high of $45.6 billion (in nominal terms) of pandemic related payments, the trend of lower government payments will continue into 2023. Producers making their elections in the ARC-CO/ PLC program will have a very low likelihood of a payment in 2024.  Government forecasted payments to farmers in 2023, estimated at 10.2 billion, will be the lowest since 2014 (non-adjusted for inflation)

Any Silver Lining?   

Farmers that waited to buy fertilizer in 2023 instead of prepaying in the Fall, have been pleasantly rewarded as fertilizer prices have been in a downward trend since the beginning of the New Year.  Farmers refusal to buy at 2022 price levels helped to create greater stocks of fertilizer in the world market.  Improved river transportation issues and lower freight costs and downward movement in  natural gas prices have brought the prices of commonly used fertilizers down by significant amounts.

Planning for 2023

Communication, planning, and budgeting continue to be critical as we move into 2023.  Below we provide suggestions for you to consider.

15 Ohio Counties Eligible for Emergency Farm Loan Assistance Through Ohio Farm Service Agency

By David Marrison, OSU Extension Field Specialist- Farm Management

Farm operations in 15 Ohio counties are eligible to apply for emergency credit through the U.S.D.A. Farm Service Agency’s Emergency Farm Loan program. These loans can be used to meet various recovery needs including the replacement of essential items such as equipment or livestock, reorganization of a farming operation or the refinance of certain debts.

The Emergency loan program is triggered when a natural disaster is designated by the Secretary of Agriculture or a natural disaster or emergency is declared by the President of the United States under the Stafford Act. These loans help producers who suffer qualifying farm related losses directly caused by the disaster in a county declared or designated as a primary disaster. In addition, farmers located in counties that are contiguous to the primary designated county may also qualify for this loan program.

Ohio Counties Eligible:

A declaration was made for Brown and Clermont Counties on November 4, 2022 with the following contiguous counties eligible: Adams, Clinton, Hamilton, Highland and Warren Counties. This declaration was made for excessive rainfall that occurred from May 1 to June 16, 2022. The application deadline for these counties is May 29, 2023.

A declaration was made for Licking County on February 9, 2023 with the following contiguous counties eligible: Coshocton, Delaware, Fairfield, Franklin, Knox, Muskingum, and Perry. This declaration was made for excessive rainfall and moisture that occurred from April 1 to September 15, 2022. The application deadline for these counties is August 21, 2023.

More Resources

More information about the Emergency Loan program can be found at: https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/FactSheets/2019/emergency-loan-program.pdf

Additional information can be obtained by contacting your local  USDA Service Center.

Farm Office Live Webinar to be Held on February 17 at 10:00 a.m.

Ohio’s farm and agribusiness industry are invited to attend OSU Extension’s  “Farm Office Live” webinar on Friday, February 17, 2023 from 10:00 to 11:30 a.m.  The Farm Office Team providing farm management and agricultural and resource law updates during this webinar.

This month’s session topics and featured speakers include:

Ohio Land Values and Cash Rents- Barry Ward

Making the 2023 Farm Bill Decision- Chris Bruynis

Legislative Update- Peggy Hall

Understanding Farm Insurance Policies – Robert Moore

Farm Accounting: Chart of Accounts with a Purpose- Bruce Clevenger

Pandemic Assistance Revenue Program (PARP) & USDA Disaster Declarations- David Marrison

There is no fee to attend this session. Register or watch replays at: go.osu.edu/farmofficelive

Agricultural Guestworkers in Ohio: What We Know and Where We’re Going

Please join OSU Extension, with support from the Farm Financial Management and Policy Institute, and the Ohio Commission on Hispanic and Latino Affairs (OCHLA) on n February 15 from 1:00 to 2:30 p.m. to learn more about agricultural guest workers in our state.

Each year, OCHLA publishes Latino Community Reports designed to educate and facilitate discussion on particular challenges and opportunities facing Hispanic Ohioans. This season’s publication focuses on the H-2A guest worker population in Ohio. During this event, Anisa Kline, author of the report, will present original research results from her survey of 285 H-2A workers across Ohio.  Following her presentation stakeholders from across sectors will respond to her findings.  These panelists will include

Silvia Hernandez (Starting Point Outreach Center), Dr. José Salinas (Ohio Migrant Education Center), Phil Riehm (Riehm’s Produce), and Dr. Margaret Jodlowski (Department of Agricultural, Environmental and Developmental Economics, OSU). This panel will be moderated by OCHLA’s Executive Director, Lilleana Cavanaugh.

This program will be held  in Room 250A of the Agricultural Administration Building at The Ohio State University located at 2120 Fyffe Road in Columbus, Ohio.  A reception with light refreshments will follow starting at 2:30 p.m. This hybrid event is free and open to the public, but registration is required. Click here for registration link.

Click here to access a program flyer about this event

 

OSU Extension Offering Quarterly Grain Market Update – Grab your Coffee for First Update on February 13

OSU Extension invites Ohio grain producers to grab a cup of coffee and join a quarterly grain market conversation with Dr. Seungki Lee, Assistant Professor in the Department of Agricultural, Environmental and Development Economics (AEDE) from 7:30 to 8:00 a.m. on February 13, April 14, September 15, and November 17, 2023.

During these webinars held via Zoom, Dr. Lee will provide his insights on the World Agricultural Supply and Demand Estimates (WASDE) crop report. “These early morning webinars will be a great way for Ohio farmers to learn more about the factors impacting the corn, soybean, and wheat markets” said David Marrison, Interim Director for OSU Extension’s Farm Financial Management and Policy Institute.  Producers are encouraged to bring their questions to this early morning conversation.

Click here for Coffee with Seungki Lee Flyer

There is no fee to attend these quarterly webinar sessions. Pre-registration can be made at go.osu.edu/coffeewithDrLee. These webinars are sponsored by: OSU Extension, Farm Financial Management & Policy Institute (FFMPI), and the Department of Agricultural, Environmental and Development Economics (AEDE) all located in The Ohio State University College of Food, Agricultural, and Environmental Sciences (CFAES).