Farm-Level Outlook. Joe L. Outlaw. Regents Fellow Professor & Extension Economist Co-Director, AFPC

Transcription

1 Farm-Level Outlook Joe L. Outlaw Regents Fellow Professor & Extension Economist Co-Director, AFPC 2017 Abner Womack Missouri Agriculture Outlook Conference March 17, 2017

2 Presentation Outline The Current Environment Choices in the Last Bill Rep Farm Results Conclusions Farm-Level Outlook

3 The Current Environment Stating the obvious farm level economics are bad... due to prices rather than input prices Nobody saw this coming so I discount those who try to tell me they now know what is going to happen Where will the needed price shock come from? Some of our Rep Farms are doing much better than others Why? Relative market prices Cost of production Didn t throw all their cash at stuff

4 Missouri Base Acres by Program Choice, All Crops Total Base Acres 9,550,630 3,464,422 5,181, , ,060 38,735 ARC CO ARC CO NI ARC CO I ARC IC PLC

5 Missouri Base Acres by Program Choice, Selected Crops Soybeans Grain Sorghum Corn Wheat ,000 1,500 2,000 2,500 3,000 3,500 4,000 Thousands ARC CO ARC CO NI ARC CO I ARC IC PLC

6 Digging A Little Deeper on Rice

7 Those Changes + Payment Rate Differences Yield a Big Deal

8 2016 Generic Acres Attributed to Other Crops in U.S. Total Generic Attributed 9.7 million 2,957, , ,017, , ,152 2,650, ,458 Wheat Rice Corn Grain Sorghum Peanuts Soybeans All Other

9 2016 Generic Acres Attributed to Other Crops in Missouri Total Generic Attributed 308, ,612 29, , , , , Wheat Rice Corn Grain Sorghum Peanuts Soybeans All Other

10 CBO and FAPRI Baseline Prices for Corn $/bushel CBO March 2012 FAPRI Jan 2016 Actual FAPRI Jan 2017

11 CBO and FAPRI Baseline Prices for Soybeans $/bushel CBO March 2012 FAPRI Jan 2016 Actual FAPRI Jan 2017

12 CBO and FAPRI Baseline Prices for Wheat $/bushel CBO March 2012 FAPRI Jan 2016 Actual FAPRI Jan 2017

13 CBO and FAPRI Baseline Prices for Peanuts $/ton CBO March 2012 FAPRI Jan 2016 Actual FAPRI Jan 2017

14 Definition of Financial Position Good Less than 25% chance of a negative ending cash balance and less than 25% chance of losing real net worth Marginal A 25-50% chance of a negative ending cash balance and a 25 50% chance of losing real net worth Poor Greater than 50% chance of a negative ending cash balance and a greater than 50% chance of losing real net worth

15 AFPC Representative Feedgrain Farms ND IA NE MON MOC IN TXNP TXP TN SC NCS TXH LA TXW TXU

16 Economic Viability of Representative Feedgrain Farms, January 2017 Baseline Farm Name Overall Ranking P(Negative Ending Cash) P(Real Net Worth Declines) 7/4/ IA G IAG NEG NEG NDG NDG ING ING MOCG2300 Carroll Co MOCG4200 Carroll Co MONG2300 Nodaway Co LANG TNG TNG NCSP SCG TXNP TXNP TXPG TXHG TXWG TXUG

17 AFPC Representative Wheat Farms WA WAA OR MT CO KSN KSC

18 Economic Viability of Representative Wheat Farms, January 2017 Baseline Farm Name Overall Ranking P(Negative Ending Cash) P(Real Net Worth Declines) 3/0/ WAW WAW WAAW MTW ORW KSCW KSCW KSNW KSNW COW COW

19 AFPC Representative Cotton Farms TXE TXSP TXRP TN AL GA SC NCN NCC TXM TXCB TXV

20 Economic Viability of Representative Cotton Farms, January 2017 Baseline Farm Name Overall Ranking P(Negative Ending Cash) P(Real Net Worth Declines) 5/3/ TXSP TXSP TXEC TXRP TXMC TXCB TXCB TXVC TNC TNC ALC GA C SCC NCC NCNP

21 AFPC Representative Rice Farms

22 Economic Viability of Representative Rice Farms, January 2017 Baseline Farm Name Overall Ranking P(Negative Ending Cash) P(Real Net Worth Declines) 3/4/ CAR CAR CABR CACR TXR TXR TXBR TXER LASR ARMR ARSR ARWR ARHR MSDR MOBR4000 Pemiscot Co

23 AFPC Representative Dairies WA VT ID WI NYW NYC NV CA MO TXN TXE TXC FLN FLS

24 Economic Viability of Representative Dairies, January 2017 Baseline Farm Name Overall Ranking P(Negative Ending Cash) P(Real Net Worth Declines) 16/1/ CAD WAD WAD IDD NVD TXND TXCD TXED WID WID NYWD NYWD NYCD NYCD VTD VTD MOGD550 Dade Co MOGD400 Dade Co FLND FLSD

25 AFPC Representative Ranches MT WY SD NV CO NVS NM MO TXR TX FL

26 Economic Viability of Representative Ranches, January 2017 Baseline Farm Name Overall Ranking P(Negative Ending Cash) P(Real Net Worth Declines) 1/4/ NVB NVSB MTB WYB COB NMB SDB MOB250 Dade Co TXRB TXSB FLB

27 Conclusions Nobody sees much hope for prices it is going to take something big to sustain higher prices Unless there is a yield loss, ARC won t provide much assistance from here on... PLC pays well... Based on price forecasts... Won t stop The great unknown is... What did you do with the money???

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30 Thanks!!! Joe Outlaw