Recall that some respected observers of the U.S. farm economy have recently pointed out that farm revenue from corn and soybean production may be lower in 2016, and have concurrently stressed the importance of cost cutting.
With respect to farm costs, a news release last week from the U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS) indicated that, “U.S. farmers spent $362.8 billion on agricultural production in 2015, down 8.8 percent from 2014, reversing a long-term trend of growing costs, according to the Farm Production Expenditures report, published today by [NASS].”
The NASS news update added that, “Per farm, the average expenditures total $176,181 compared with $191,500 in 2014, down 8.0 percent. Last year, an average U.S. farm spent $28,408 on feed, $22,047 on livestock, poultry and related expenses, $20,202 on farm services, and $15,443 on labor.”
Meanwhile, Bloomberg writer Alan Bjerga reported on Friday that, “U.S. farmland values in 2016 dropped for just the second time in almost three decades after grain and soybean prices extended a slump, eroding grower profit and capping a decade-long boom when land costs jumped 65%.
“Farmland values in the lower 48 states, including land used for crops and for livestock, declined $10 to $3,010 an acre, the first drop since 2009, the U.S. Department of Agriculture said Friday in a report. Cropland declined 1 percent to $4,090 an acre, while pastureland was unchanged at $1,330 an acre.”
The Bloomberg article pointed out that, “Corn and soybeans, the two most-valuable U.S. crops, have dropped from records in 2012. As of Friday, the grain fell 61 percent to $3.3425 a bushel from the all-time high of $8.49, while the oilseed declined 45 percent.
“In February, the USDA said declining commodity prices will push farm income down 2.8 percent to $54.8 billion this year, less than half the 2013 record.”
And, a tweet from Iowa State University on Friday stated that, “Data from @usda_nass land & rental value surveys, 2016 #IowaAg rents, $235/acre, down 6% from 2015; rent as % of cropland value was 2.9%“