Farm income is on the way down in 2014

The United States Department of Agriculture released its Farm Income projections for 2014 on Tuesday, February 11.  According to the desmoinesregister.com, the projections are showing almost a thirty percent drop in net farm income compared to 2013.

 

Income on the way down

Farm Income Forecast to Drop in 2014

Farm Income Forecast to Drop in 2014

USDA Chief Economist Joe Glauber (photo courtesy of beltway beef.com)

USDA Chief Economist Joe Glauber (photo courtesy of beltway beef.com)

 

Joe Glauber is the Chief Economist for the USDA, and one of the principal architects of the report.  He said, “Net cash income is projected to be just under 102 billion dollars, a 22 percent reduction from last year.  Net farm income, which takes in the value of stored grain on the farm, is projected to be 958 billion dollars, which is down 35 billion dollars from 2013, almost a 27 percent drop.”

 

Mitch Moreheart, a senior agricultural economist with USDA, told the desmoinesregister.com that one of the biggest reasons behind the drop is a lower commodity price for crops like corn and soybeans.  Crop prices have been at all-time highs in recent years, but Glauber said they’re on the way down:

 

 

Glauber said the recently passed Farm Bill contains reforms that will take another big chunk out of farm income in 2014:

 

 

The USDA website said government payments to farmers will total just over 6 billion dollars in 2014, but that’s close to a 50 percent decrease from 2013.  The loss in government payments means an additional 5 billion dollars in cuts to farm incomes.

 

Some good news ahead

 

While crop receipts will drop roughly 12 percent, Glauber said, “Livestock receipts, by the way, are up marginally.  They’re up at 184 billion dollars.  It’s the first time in a long time we’ve seen crop receipts and livestock receipts at roughly the same level of income.”

 

The livestock sector is getting help from the other bit of positive news in the economic forecast.  “On-farm expenses are forecast to be down, right at 310 billion dollars,” said Glauber.  “That’s primarily due to the lower cost of feed.”  The USDA said it’s only the second time in 10 years that expenses were lower than the year before.

 

Moreheart told the desmoinesregister.com the livestock sector has a very optimistic outlook because it doesn’t cost as much to feed the animals, dairy-farming revenue should pick up, and the beef herd is expected to expand in the near future.

USDA Secretary of Agriculture Tom Vilsack (photo from politico.com)

USDA Secretary of Agriculture Tom Vilsack (photo from politico.com)

 

USDA Secretary of Agriculture Tom Vilsack spoke about the income forecast, and said the lower numbers didn’t surprise him.  He did say it’s important to keep perspective on the lower numbers:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Keeping a weather eye on Minnesota

“Persistent.”  Not exactly the word many Minnesotans may choose to describe this winter, but it’s appropriate, according to Mark Seely, University of Minnesota Extension climatologist.

U of Mn Extension climatologist Mark Seely (photo from minnesotaalumni.org)

U of Mn Extension climatologist Mark Seely (photo from minnesotaalumni.org)

 

According to a recent Google search, the word ‘persistent’ has many interesting synonyms:  tenacious, determined, single-minded, relentless, interminable, and uninterrupted.  Seely said the reason all these words fit is it hasn’t been this consistently cold in Minnesota and the Midwest in a long time. In fact, the Minnesota Public Radio website calls this “the coldest winter in 30 years.”

 

Looking back

 

Seely said the interesting thing about this bitterly cold winter is, “it didn’t necessarily start early.  The winter that we know it as, frankly, didn’t start until the first week of December.”  Since then, Seely said the state has been in a deep freeze, the likes of which it hasn’t seen in some time.

 

“Since December, it’s been the coldest weather, by any measure, since the winter of 81-82.”  Winter this consistently cold is a new experience for many young Midwesterners:

 

Seely said the Midwest has had colder winters, but few that have been this persistent.  “It has been so consistently cold, we’ve had many of our observers report large numbers of nights with below zero readings.”

How this winter stacks up against past winters (graph courtesy of the Twin Cities NWS)  (photo from blogs.mprnews.org)

How this winter stacks up against past winters (graph courtesy of the Twin Cities NWS) (photo from blogs.mprnews.org)

 

What is driving the cold?

 

According to the Weather Underground website, a weather phenomenon known as the polar vortex may be driving this relentlessly cold weather in the Midwest.  The polar vortex is an area of very cold air that typically centers over Siberia and Canada’s Baffin Island.  A piece of the vortex broke off, and was forced south in part by the Jet Stream, into the Great Lakes Area of the US.

 

DTN Senior Meteorologist Mike Palmerino said “An unusual area of warm air over Alaska and northwest Canada pushed the cold air south.  They’ve had a lot of warm weather in Alaska this year.”  The polar air has pushed south in the past, so it’s not an unusual occurrence.

DTN meteorologist Mike Palmerino  (Photo from www.dtnprogressivefarmer.com)

DTN meteorologist Mike Palmerino (Photo from www.dtnprogressivefarmer.com)

 

Uneven snow cover

 

“I would say the eastern half of the state ended up with fairly decent snow cover that’s pretty consistent,” said Seely.  “However, the western half of the state, because of the high winds, ended up with variable snow cover.  In areas unprotected from the wind, our weather observers have reported seeing areas of bare soil in their farm fields.”

 

Seely said in unprotected areas, the lack of snow cover has allowed the permafrost has driven 4 to 6 feet deep, and that’s something, “We haven’t seen that in a long, long time.”  That means the ground is going to take time to thaw for spring planting in Minnesota.

One of the few areas where wild grass pokes through snow cover in SE Mn (photo by Chad Smith)

One of the few areas where wild grass pokes through snow cover in SE Mn (photo by Chad Smith)

 

What is ahead?

 

“The weather models are coming together and showing some moderation for the rest of the winter,” said Seely.  “That’s not to say we won’t have colder than normal days, but the sheer number of below zero days are going to go away.”

 

Palmerino said soils “east of the Mississippi River are in pretty good shape moisture-wise.  If anything, I think the main concern going into spring is that it’s too wet.”  He said “a stormy weather pattern and cooler than normal temperatures would definitely interrupt spring planting.”

 

Seely said the good news is the future models are showing moderating temperatures into March.  However, not all the predictions are positive:

 

Palmerino said it’s a fine line when farmers look to spring.  You want the weather to warm up and melt the snow, but not too fast either:

SE Mn has a lot of snow to get rid of before spring planting (photo by Chad Smith)

SE Mn has a lot of snow to get rid of before spring planting (photo by Chad Smith)

 

Here’s what it’s been like to drive in the Midwest this winter:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm Bill is the first step for Agriculture in 2014

American agriculture leaped over a major hurdle with President Barack Obama signing into law the 2014 Farm Bill during a ceremony at Michigan State University on Friday, February 7th.  According to the New York Times website, the Bill was several years in development, but came together early this year, adding stability to the Ag sector of the American economy.

Dairy farming is one of many areas of the economy regulated by the Farm Bill (photo by Chad Smith)

Dairy farming is one of many areas of the economy regulated by the Farm Bill (photo by Chad Smith)

 

While it was a major hurdle to overcome, it was just the first in a series of hurdles the Ag sector faces as it looks to the 2014 calendar.  Agriculture involves a very diverse group of people and organizations, but there are some common concerns listed by many of the groups, even as they celebrate a new Farm Bill.

 

2014 starts with good news

 

Kevin Paap is the Minnesota Farm Bureau President.  According to their website, the Farm Bureau calls itself “an advocate for agriculture, driven by the beliefs and policies of it’s members.” He said the Farm Bureau has been working with lawmakers to get a new Farm Bill in place, and it was a long time in coming together:

 

Chandler Goule is the Vice President of Government Relations for the National Farmers Union.  The NFU website bills it’s organization as “United to grow Family Agriculture.”  He said the Farmers Union feels it’s a good bill, and says there are a lot of positives in the legislation for family farmers, including country of origin labeling for meat products at the grocery store:

Chandler Goule of the National Farmers Union (photo from newenglandfarmersunion.org)

Chandler Goule of the National Farmers Union (photo from newenglandfarmersunion.org)

 

Renewable Fuels still a challenge

 

According to the website ethanol-information.com, the Renewable Fuels Standard is a part of “energy legislation that would set a minimum number of gallons to be used in the nation’s transportation fuel supply each year, including corn-based ethanol and biodiesel, which is soybean-based.”

Minnesota Farm Bureau President Kevin Paap (photo from twitter.com/kevinpaap)

Minnesota Farm Bureau President Kevin Paap (photo from twitter.com/kevinpaap)

 

According to the Biotechnology Industry organization website, the EPA recently proposed slashing the mandated amount of renewable fuels in the nation’s supply.  Paap said that’s simply unacceptable. “The Renewable Fuels Standard is working.  We’ve got cleaner air; we’ve got more jobs, economic development, and energy diversity.  There are over 380,000 jobs just from ethanol production.”

 

Goule said, “The rug has been completely pulled out from under the Renewable Fuels Standard.  Big oil companies don’t want us to grow our own fuel, and they don’t want to give up their share of the marketplace.” He said, “Land-grant University studies have shown the price of gas will go up without an RFS.”  Rural America will also be hit hard as well:

 

 

Immigration reform to deal with

 

Beginningfarmers.org quoted a White House report on their website, saying, “Among all economic sectors, the U.S. Ag sector is particularly reliant on foreign born workers.”  Papp said, “Agriculture hires about a million workers a year.  It’s physical labor, and it takes place in all seasons.  We need the ability to find workers when they’re needed.  Crops and livestock won’t wait for farmers to find help.”

 

He said, “The current H-2A program is not working.  It’s too costly, there’s administrative delays, and it’s got very tough recruiting requirements.”

 

Goule said many folks outside of the Ag sector don’t realize how important the immigration issue is to agriculture:

 

A lot to do yet

 

Agriculture did enjoy a big victory, but Papp said there is still a lot to do yet:

 

Goule agrees:

 

Is OSHA guilty of regulation overreach on grain bins? (photo by Chad Smith)

Is OSHA guilty of regulation overreach on grain bins? (photo by Chad Smith)

 

Bob Stallman is the President of the American Farm Bureau Federation, which is the national umbrella organization for the Minnesota Farm Bureau.  He spoke recently on the Georgia Farm Bureau’s website about issues Ag will have to deal with in 2014

 

Southeast Minnesota farmers take a hit in 2013

The catchphrase is “prior planning prevents poor performance.”  In 2013, southeast Minnesota farmers found out that Mother Nature can have plans of her own.

 

Southeast Minnesota farmers saw a banner year in 2012, with the growing season producing bumper crops.  In 2013, farmers saw a complete 180-degree turn for the worse, and the area is still feeling the effects as farmers look to the upcoming growing season, when they get back into the farm fields that help produce our nation’s food supply.

 

2013 started poorly

 

Lisa Behnken is a Regional Extension Educator in Crops with the University of Minnesota Extension Office in Rochester, and she said 2013 saw a very slow, wet start to the season.  When spring did finally begin to wake up, the first problem area farmers saw hit the livestock industry particularly hard.

 

Lisa Behnken of the U of Mn Extension office, Rochester (Extension Photo)

Lisa Behnken of the U of Mn Extension office, Rochester (Extension Photo)

“The first thing that hit people was the alfalfa,” said Behnken. “We had a massive alfalfa winterkill.”  She said roughly 50 to 90 percent of a farmer’s acres died.  This alfalfa is a prime source of feed for the beef and dairy cattle industries, and farmers were in a tough spot.  Behnken called it the first “big, red flag of the spring.”

 

A wet spring delays planting

 

Behnken said farmers took the winterkill into consideration heading into spring planting, and rearranged some plans to include re-seeding of alfalfa, but here came the next challenge:

 

2013 was hard on livestock farmers because of alfalfa winterkill

2013 was hard on livestock farmers because of alfalfa winterkill

Southeast Minnesota saw a very wet spring.  Behnken looked back at the calendar as May 2 saw an estimated 15 to 20 inches of “heavy, wet snow” blanket the region.  “It turned cold, and the snow just stayed in the fields.  There was virtually no window to plant in the month of May.”

 

She estimated farmers saw a very small window to plant in mid-May, when a few fields opened up.  Farmers were able to plant a few fields of corn into the dead alfalfa stands, but there was still manure and fertilizer to get down on empty fields, and it was “a lot to do in a very small window,” said Behnken.

 

To plant or not to plant

 

May 31 was the deadline for farmers to decide on taking payments for prevented planting acreage, or to keep forging ahead to try to get corn in the ground, and it was a tough decision for everyone, but especially for livestock farmers.  Behnken said the livestock farmers “needed feed for their animals.  They had to plant.”

 

June 15 led to another tough decision for farmers – whether or not to plant soybeans or take prevented planting

payments to help cover some of their farming costs.  “Acres were still under water in mid-June.  It’s not like they were going to dry out if we had many sunny days in a row.  They were simply not plantable.”

To plant or not to plant?  A tough decision for many farmers in 2013 (photo from nebraskacorn.org)

To plant or not to plant? A tough decision for many farmers in 2013 (photo from nebraskacorn.org)

 

Livestock producers weren’t the only ones who needed to produce grain.  Grain farmers who had forward contracted their crops owed bushels to their local elevators.  Farmers who had contracts with ethanol plants had to come up with bushels as well for the plants to use in their production.

 

June fields were very muddy, very sticky, and “it was very tough planting conditions,” according to Behnken.  As a result, southeast Minnesota farmers were still planting well into July.

 

An aphid explosion in August

 

“As the weather began to change, warming up in the third week of August, we saw soybean aphid populations explode,” said Behnken. “It’s probably the worst case I’ve seen, in terms of numbers and the speed at which populations grew.”

 

Soybean aphids (U of Mn Extension file photo)

Soybean aphids (U of Mn Extension file photo)

“If you weren’t out scouting your fields and following good IPM practices when you reach the threshold for spraying, you took a big yield hit.”  Soybeans were at least two stages behind normal growth rate, and that made the hit even worse.

 

Behnken was at a field day in early September when soybean damage was at it’s worst, and saw many bean fields that were literally black in color.  “Soybean aphids defecate excessive plant sap, called honeydew, that drips onto the lower leaves.  A black to gray mold may then colonize the honeydew, turning the surface of the leaf a dark gray.  In severe infestations, the field will take on a very dark cast.  The mold then covers the green areas of the leaf, interrupting photosynthesis, and reducing plant growth.”

 

Behnken said some farmers walked away from their fields when they saw this.  “Some farmers began to throw up their hands, understandably, and say to themselves, enough.”  Several farmers weren’t going to put any more money into their bean fields, especially since it was planted late to begin with, and they weren’t sure the returns would make up for the cost of producing the damaged crop.

 

Better harvest than expected

 

Harvest was a challenge as well.  The weather was cool, which led to “very poor drying conditions in the field,” said Behnken.  She called it a very nasty harvest season.  “It was going to be late, which we expected because we planted late.”  She offered silage as an example, which she said was chopped six weeks later than normal.

 

To exacerbate the poor drying conditions, southeast Minnesota farmers had to deal with a shortage of propane for their dryers.

 

“Our yields were…okay.  For most producers, we were pleasantly surprised that we came up with an average

Corn harvest (photo courtesy of indianagrain.com)

Corn harvest (photo courtesy of indianagrain.com)

yield,” said Behnken.  She estimated the average corn yield for the area at 150 bushels per acre, with extremes on either side of that number depending upon how much snow landed on each farm field.  “A few fields in the area did go over 200 bushels, but that was the exception.”

 

Many soybean yields came in at roughly 40 bushels per acre.  Between 40 and 55 bushels per acre is considered a pretty good year.  There were extremes as well, with “some farmers harvesting only 20 bushels per acre off their fields.  Overall, it was a modest harvest, definitely not a bin buster.”

 

Turn the calendar

 

Behnken said the Extension Service is encouraging farmers to turn the page to the New Year, but not to forget the lessons learned from a rough 2013.

 

“Let’s learn the positive lessons.  There’s going to be a weed seed bank out there.  There are going to be pest issues because some spraying last year simply didn’t get done in time.

 

“Did we do anything with our fields that would cause soil compaction issues as we get set for spring planting?”

 

She said farmers in the area did learn a lot about cover crops, which could be very beneficial to soil health in the years to come.

 

2013 was a legitimately bad year for most, and she said “it’s time to turn the page.”