American Farm Incomes Are Heading Down, But By How Much?
Given that the World Bank’s Agriculture Price Index has fallen to a low not seen since July 2009, it should come as no surprise that US farmer incomes will remain muted in 2017. Of course, the price of many agricultural inputs, including fertilizers, has also slid over the course of the last year, partially masking the drop in producer prices. Still, the outlook for farm income levels in the United States doesn’t look promising. After three years of consecutive declines in farmer incomes, we will be watching to see if the USDA projects another drop for producers in 2017 when it releases the Farm Income Forecast outlook on Wednesday.
Farm expenditures data of production expenses via USDA NASS, and Composite Price Index on agriculture via GEM Commodities.
Obama Administration Keeps Renewable Fuels on an Upward Trajectory
Last Wednesday, the Environmental Protection Agency (EPA) announced that not only will the ethanol target for blenders reach the Congressional mandate of 15 billion gallons in 2017, but also that 2.0 billion gallons of biodiesel will be mandated. In total, the EPA is lifting the renewable fuel standard (RFS) by six percent over 2016. As a new administration begins its transition, the Obama administration is clearly doubling down on its environmental priorities, providing the oil industry with another setback. While 2017 is now set in stone, we will be keeping an eye on whether a new administration and upcoming cabinet positions will have any bearing on the future of the RFS mandate.
Both US ethanol production and exports have significantly risen since a decade ago.
US Winter Wheat Faces Dryness in Key Producing States
Although the USDA rated the percentage of US winter wheat in good-to-excellent condition at 59 percent, or 8 percentage points higher than in the year ago period, dry conditions in parts of Kansas and Oklahoma—the country’s top two producers of winter wheat—are still worth keeping an eye on in the coming weeks. Although soil conditions are less severe than in recent seasons across the US plains, there is also less planted acreage to make up the difference if final yields drop in the spring. In fact, US farmers are projected to plant the lowest level of winter wheat in over 100 years. With winter dormancy around the corner and state crop progress reports taking a hiatus in December, we will be paying closer attention to climate indicators, including snow coverage, across the Great Plains.
The green portions of this evapotranspiration anomalies map indicate higher than average evapotranspiration levels relative to a 10-year average, while red indicates lower than average levels.