Crop Production and Outlook - the Demand side

The latest round of USDA updates to its World Agricultural Supply and Demand Estimates and Crop Production reports were released on Oct. 10. On the demand side, corn feed demand was projected at 5.35 billion bushels, up 150 million from last month, reversing the move from last month. Lower corn prices are seen as the major reason for this shift. Corn demand from ethanol was reduced by 100 million bushels to 4 billion bushels. While lower corn prices should be attractive to the ethanol industry, reduced transportation fuel consumption is a significant drag to the industry. Combined with general economic concerns, ethanol blending growth is expected to slow

2009 Crop Year is Mirror Image of 2008

The parallels between the 2009 crop season and the 2008 crop season are striking. This summer is closing out much like last summer for crops. The early season concern about delayed planting and crop progress is fading under steady doses of sunshine and timely rains. And with crop conditions holding, crop production is up and prices have worked their way down

Crop Market Outlook

The delays in planting led to delays in crop development and conclude with delays in harvesting. As of Nov. 23, 86 percent of Iowa’s corn was harvested, roughly 12 percent behind normal. The harvesting backlog, in combination with higher fertilizer prices, has fall fertilizer application behind as well. Normally, over half of fall fertilizer applications are done by this point in the year. Currently, we are at 32 percent. The delays of the 2008 crop are slowing the prep work for the 2009 crop

2013 Crop market outlook

Despite the drought, the agricultural crop sector continues to record breaking crop values. Even though corn and soybean production fell dramatically in 2012, both corn and soybeans will set records in terms of the values of the crops due to the high prices being received. A decade ago, the corn crop was worth $20 billion. The 2012 corn crop is currently valued at over$80 billion. In 2002, the national soybean crop had a production value of $15 billion. The current crop is valued at nearly$45 billion. So crop agriculture continues to produce significant economic value, even as the rest of the economy has struggled to grow

Eligibility and Payment Requirements of the Disaster Assistance Package

Discusses the details of the disaster assistance package approved by Congress in the fall of 1998. The package provides $2.375 billion for financial assistance to farmers who have suffered losses due to natural disasters. Crop loss disaster assistance is available for 211 crops included in either federal crop insurance or the Noninsured Crop Disaster Assistance Program (NAP). Producers may qualify for crop loss compensation on either a single year (1998) or multi-year (1994-1998) basis

May Crop Outlook

With the May reports, USDA updated its estimates for 2008/09 and put out its first official estimates for 2009/10. On the corn side, ethanol and export demand are increased by 50 million bushels each for 2008. Both of these uses have experienced a rebound over the past few weeks

Ethanol: Policies, Production, and Profitability

The proposed federal energy bill, currently back in committee for further debate, has targeted a dramatic increase in the use of renewable fuel sources, and that has helped focus a vast amount of attention on ethanol over the past year. By 2012, five billion gallons of renewable fuels would make up part of the nation’s fuel supply. That is nearly double the current amount of ethanol in use

Examining agricultural investment

Using two different approaches, the relationship between a firm\u27s investment and its financial variables is examined. Imperfections in the credit market such as asymmetric information have led researchers to explore these relationships. This study incorporates the 5 Cs of lending (character, capacity, collateral, credit rating, and capital) into the farmer\u27s investment decision and explores the impacts of these variables on a basic data set. The data set is composed of 590 Iowa farms that are members of the Iowa Farm Business Association and have reported farm level financial and production data from 1991 to 1995;The first approach consists of a composite regression model constructed from various elements of traditional investment models and variables representing the 5 Cs. The second approach derives an investment equation from the firm\u27s optimization problem, an Euler equation approach. The 5 Cs of lending are incorporated into the problem through a borrowing constraint;The composite regression approach is conducted under a Bayesian framework with variable selection and outlier detection components. The results imply strong support for the accelerator model of investment and the inclusion of other relevant variables, among them the value of short-term assets, one of the proxies for the 5 Cs. Another of the proxies, operator age, receives less support. The Bayesian framework with the variable selection and outlier detection components works extremely well;The Euler equation approach is more problematic. Under the original specification looking at net investment, all models are rejected and the most preferred model is also the most restrictive with symmetric adjustment costs and no financial constraint. Within the financial constraint, only the value of short-term assets and net worth are ever found to be statistically significant. Estimated adjustment costs are either negative or positive but extremely small. The shadow value of external finance is estimated to be around 100 percent. Other formulations, extensions, and reduced form models are explored and similar results are found. Given the mostly negative results from the Euler equation framework possible reasons for them are reviewed

The highs and lows of crop marketing

The month of October provided a bounce back for the 2014 crop outlook. While supplies are still more than ample, the trade has shifted its focus to demand. And that shift has put prices on an upward march. The price recovery has come just as the bulk of the Iowa crop production exits the field

The Outlook for Corn and Ethanol

The federal government definitely joined in the spirit of cooperation this holiday season with the passage of the 2007 energy act and progress on the farm bill. These moves, along with developments in the energy and agricultural sectors, have improved the prospects for corn and ethanol over the next few years