tag:farmdocdaily.illinois.edu,2013://8 2013-05-23T18:02:52Z The goal of the farmdoc project is to be at the forefront of harnessing the power of the Internet to deliver answers to the tough economic questions that agricultural producers and managers face. Since its inception over a decade ago the farmdoc project has consistently delivered unbiased and timely economic information and analysis to agricultural producers and businesses. Farmers, extension educators, farm managers, market analysts and many others across the U.S. and around the world have come to rely extensively on the comprehensive and current information and analysis available at farmdoc sites. Agricultural news in crop insurance, agricultural law, farmland values, crop prices, agricultural outlook, farm management and agricultural taxation. Movable Type Pro 5.14-en tag:farmdocdaily.illinois.edu,2013://8.6052 2013-05-23T18:03:00Z 2013-05-23T18:02:52Z

Last week the Senate and House Ag Committees successfully passed their versions of the 2013 Farm Bill. As discussed in a post from last week, price support programs now exist in both versions, making it highly likely that price supports will continue to be offered to the major program crops over the next Farm Bill period.

Site Administrator www.farmdocdaily.illinois.edu Last week the Senate and House Ag Committees successfully passed their versions of the 2013 Farm Bill. As discussed in a post from last week, price support programs now exist in both versions, making it highly likely that price supports will continue to be offered to the major program crops over the next Farm Bill period. tag:farmdocdaily.illinois.edu,2013://8.6050 2013-05-22T13:52:00Z 2013-05-22T13:53:07Z

The USDA's weekly Crop Progress report indicated that 43 percent of the U.S. corn acreage was planted during the week ended May 19, 2013. In terms of percentage of acreage planted, that equaled the record progress for the week ended May 10, 1992. In 1992, 79.3 million acres of corn in the U.S. were planted, implying that 34.1 million acres were planted during the peak week that year. U.S. corn planting intentions for 2013 were reported at 97.3 million acres, implying that 41.8 million acres were planted last week. Conventional wisdom explains the rapid rate of planting progress this year as a function of larger and more technologically sophisticated planters.

Site Administrator www.farmdocdaily.illinois.edu Crop Progress report indicated that 43 percent of the U.S. corn acreage was planted during the week ended May 19, 2013. In terms of percentage of acreage planted, that equaled the record progress for the week ended May 10, 1992. In 1992, 79.3 million acres of corn in the U.S. were planted, implying that 34.1 million acres were planted during the peak week that year. U.S. corn planting intentions for 2013 were reported at 97.3 million acres, implying that 41.8 million acres were planted last week. Conventional wisdom explains the rapid rate of planting progress this year as a function of larger and more technologically sophisticated planters. ]]> tag:farmdocdaily.illinois.edu,2013://8.6049 2013-05-21T17:55:00Z 2013-05-21T18:04:34Z

Farmland prices continue to increase during the first part of 2013. However, farmland prices appear to be in line with current agricultural returns and current levels of interest rates. Currently, interest rates are low, leading to support for high and increasing farmland prices. A rising interest rate environment could lead to downward pressure being placed on farmland prices. In this post, historical interest rates are examined to place the current interest rate environment into context.

Site Administrator www.farmdocdaily.illinois.edu Farmland prices continue to increase during the first part of 2013. However, farmland prices appear to be in line with current agricultural returns and current levels of interest rates. Currently, interest rates are low, leading to support for high and increasing farmland prices. A rising interest rate environment could lead to downward pressure being placed on farmland prices. In this post, historical interest rates are examined to place the current interest rate environment into context. tag:farmdocdaily.illinois.edu,2013://8.6048 2013-05-20T16:51:00Z 2013-05-20T16:51:44Z

Listen to MP3 podcast Corn and soybean prices rallied sharply beginning in July 2012 as U.S. drought conditions unfolded. It was generally expected that prices would follow the pattern experienced in other "short crop" years, with prices peaking near harvest and then returning to pre-drought levels later in the marketing year. That pattern has generally unfolded, with some differences between corn and soybeans and between old crop and new crop prices.

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Corn and soybean prices rallied sharply beginning in July 2012 as U.S. drought conditions unfolded. It was generally expected that prices would follow the pattern experienced in other "short crop" years, with prices peaking near harvest and then returning to pre-drought levels later in the marketing year. That pattern has generally unfolded, with some differences between corn and soybeans and between old crop and new crop prices.]]> tag:farmdocdaily.illinois.edu,2013://8.6046 2013-05-17T16:00:00Z 2013-05-17T16:03:33Z

The economic and financial environment that has been in place in the recent past has led to strong farm earnings. While some expense categories have been high, the combination of yields and prices has been such that earnings have exceeded expectations. While earnings have been good, there has been a record level of investment back into the farm; some of that has been with cash and some has been with borrowed funds. Today's post will look at the changes in leverage that have taken place from 1996 to 2012 as measured by the Interest Expense Ratio.

Staff The economic and financial environment that has been in place in the recent past has led to strong farm earnings. While some expense categories have been high, the combination of yields and prices has been such that earnings have exceeded expectations. While earnings have been good, there has been a record level of investment back into the farm; some of that has been with cash and some has been with borrowed funds. Today's post will look at the changes in leverage that have taken place from 1996 to 2012 as measured by the Interest Expense Ratio. tag:farmdocdaily.illinois.edu,2013://8.6045 2013-05-16T17:14:00Z 2013-05-23T17:19:11Z

After creating a one-year extension to the 2008 Farm Bill in the midst of larger budget issues at the end of last year, Congress has resumed the Farm Bill process. Both the Senate and House Ag Committees have released 2013 Farm Bill markups. Both the Senate and House drafts are similar to the versions passed by the full Senate and House Ag Committee in 2012 in that the majority of existing commodity programs (direct, countercyclical, ACRE, and SURE programs) are repealed to achieve spending reductions. However, there have been some slight changes to the programs created to replace those being repealed, particularly in the new version from the Senate. Today's post provides a summary of some of those commodity program changes. Discussion of continued changes in other titles, such as Crop Insurance, and the budget implications will be saved for future posts.

Site Administrator www.farmdocdaily.illinois.edu After creating a one-year extension to the 2008 Farm Bill in the midst of larger budget issues at the end of last year, Congress has resumed the Farm Bill process. Both the Senate and House Ag Committees have released 2013 Farm Bill markups. Both the Senate and House drafts are similar to the versions passed by the full Senate and House Ag Committee in 2012 in that the majority of existing commodity programs (direct, countercyclical, ACRE, and SURE programs) are repealed to achieve spending reductions. However, there have been some slight changes to the programs created to replace those being repealed, particularly in the new version from the Senate. Today's post provides a summary of some of those commodity program changes. Discussion of continued changes in other titles, such as Crop Insurance, and the budget implications will be saved for future posts. tag:farmdocdaily.illinois.edu,2013://8.6043 2013-05-15T14:55:00Z 2013-05-15T14:55:52Z

A prior article, "Updating your Estate and Succession Plan" discussed why a prior estate plan might not produce the results you expected due to law changes. This article discusses the reaction your heirs might have if they only learn of your plans at the reading of the will.

Site Administrator www.farmdocdaily.illinois.edu A prior article, "Updating your Estate and Succession Plan" discussed why a prior estate plan might not produce the results you expected due to law changes. This article discusses the reaction your heirs might have if they only learn of your plans at the reading of the will. tag:farmdocdaily.illinois.edu,2013://8.6041 2013-05-14T19:27:00Z 2013-05-14T21:28:46Z

Earlier this year the Supreme Court heard arguments in a patent law case pertaining to Monsanto's Round Up Ready technology. The unanimous decision delivered Monday May 13, 2013 upheld a lower court's decision against Indiana farmer Vernon Bowman.

Site Administrator www.farmdocdaily.illinois.edu Earlier this year the Supreme Court heard arguments in a patent law case pertaining to Monsanto's Round Up Ready technology. The unanimous decision delivered Monday May 13, 2013 upheld a lower court's decision against Indiana farmer Vernon Bowman. tag:farmdocdaily.illinois.edu,2013://8.6042 2013-05-14T18:30:00Z 2013-05-14T18:37:05Z

Listen to MP3 podcast The period of high grain farm incomes since 2006 has led to an overall strengthening of balance sheets on grain farms. Some concerns exist that much of this strengthening could erode quickly during a period of lower returns and declining farmland prices. While these concerns are legitimate, farmers have generally prepared themselves well to withstand lower returns. How much financial stress farms face likely will depend on the ability to curtail capital expenditures and family living withdrawals once a lower returns environment occurs.

Site Administrator www.farmdocdaily.illinois.edu Listen to MP3 podcast
The period of high grain farm incomes since 2006 has led to an overall strengthening of balance sheets on grain farms. Some concerns exist that much of this strengthening could erode quickly during a period of lower returns and declining farmland prices. While these concerns are legitimate, farmers have generally prepared themselves well to withstand lower returns. How much financial stress farms face likely will depend on the ability to curtail capital expenditures and family living withdrawals once a lower returns environment occurs.]]> tag:farmdocdaily.illinois.edu,2013://8.6040 2013-05-13T16:22:00Z 2013-05-13T16:23:04Z

Listen to MP3 podcast The USDA's May 10 WASDE report contained supply and consumption projections for the 2013-14 marketing year for U.S. corn and soybeans. For the most part, the market focused on the projections of crop size, but the most important information is in the projections of marketing year consumption.

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The USDA's May 10 WASDE report contained supply and consumption projections for the 2013-14 marketing year for U.S. corn and soybeans. For the most part, the market focused on the projections of crop size, but the most important information is in the projections of marketing year consumption. ]]> tag:farmdocdaily.illinois.edu,2013://8.6039 2013-05-10T15:17:00Z 2013-05-10T15:21:00Z

This post is the 4th in a series that contrasts and compares the farm prosperity of the 1970s with the current period of farm prosperity. This post examines U.S. farm expenses during the two periods.

Site Administrator www.farmdocdaily.illinois.edu This post is the 4th in a series that contrasts and compares the farm prosperity of the 1970s with the current period of farm prosperity. This post examines U.S. farm expenses during the two periods. tag:farmdocdaily.illinois.edu,2013://8.6038 2013-05-09T16:37:00Z 2013-05-09T16:37:29Z

An important aspect of the on-going debate over the new farm bill is the proposed elimination of direct payments. This proposal differentially impacts the program crops, prompting a debate among crops and geographical regions over the distribution of payments by farm safety net programs. We believe this issue is the most important in the farm bill debate. We therefore examine it in more detail. This post specifically compares the distribution of payments by the direct payment, crop insurance, and price risk programs. The comparison begins with the 2003 crop year because the counter-cyclical program, an important price risk program, was initially enacted in the 2002 Farm Bill.

Site Administrator www.farmdocdaily.illinois.edu An important aspect of the on-going debate over the new farm bill is the proposed elimination of direct payments. This proposal differentially impacts the program crops, prompting a debate among crops and geographical regions over the distribution of payments by farm safety net programs. We believe this issue is the most important in the farm bill debate. We therefore examine it in more detail. This post specifically compares the distribution of payments by the direct payment, crop insurance, and price risk programs. The comparison begins with the 2003 crop year because the counter-cyclical program, an important price risk program, was initially enacted in the 2002 Farm Bill. tag:farmdocdaily.illinois.edu,2013://8.6037 2013-05-08T15:00:00Z 2013-05-08T15:00:07Z

The American Taxpayer Relief Act of 2012 (ATRA) addressed many of the tax issues concerning taxpayers. ATRA made permanent many of the tax provisions that were scheduled to expire. For example, it provided a permanent exemption amount for the alternative minimum tax (AMT) and, more importantly, it indexed it for inflation.

Site Administrator www.farmdocdaily.illinois.edu The American Taxpayer Relief Act of 2012 (ATRA) addressed many of the tax issues concerning taxpayers. ATRA made permanent many of the tax provisions that were scheduled to expire. For example, it provided a permanent exemption amount for the alternative minimum tax (AMT) and, more importantly, it indexed it for inflation. tag:farmdocdaily.illinois.edu,2013://8.6036 2013-05-07T14:52:00Z 2013-05-07T15:15:59Z

Farm Bill markup likely will begin soon in both the Senate and House Agricultural committees. Much of the focus for traditional program crops will be around three programs: a revenue program, a target price program, and a supplemental crop insurance program. While the exact nature of the programs will depend on negotiations, what is almost certain is that the programs' rationale will be risk management. Given a risk management focus, Farm Bill negotiations will need to debate and somehow resolve the following seven questions.

Site Administrator www.farmdocdaily.illinois.edu Farm Bill markup likely will begin soon in both the Senate and House Agricultural committees. Much of the focus for traditional program crops will be around three programs: a revenue program, a target price program, and a supplemental crop insurance program. While the exact nature of the programs will depend on negotiations, what is almost certain is that the programs' rationale will be risk management. Given a risk management focus, Farm Bill negotiations will need to debate and somehow resolve the following seven questions. tag:farmdocdaily.illinois.edu,2013://8.6035 2013-05-06T15:54:00Z 2013-05-06T16:09:42Z

Most of the discussion in the corn market has centered on U.S. planting progress, the likely magnitude of planted acreage, and the U.S. average yield potential. The pace of planting as revealed by the USDA's weekly Crop Progress report will continue to be monitored closely for clues about production potential.

Site Administrator www.farmdocdaily.illinois.edu Crop Progress report will continue to be monitored closely for clues about production potential.]]>