Does the exceptionally high soybean yields in recent years mean soybean yields are increasing relative to corn yields? Gary Schnitkey, an agricultural economist at the University of Illinois, recently examined this question. Using state yield data from the National Agricultural Statistics Service for 1972 to 2017, Schnitkey examined corn and soybean yield trends across the Corn Belt to see if soybean yield increases are outpacing those in corn. For Nebraska, Schnitkey found the state average corn yield increased an average of 2.0 bushels per year between 1972 and 2017. At the same time, the average soybean yield increased by .65 bushels per year. The soybean yield-to corn yield ratio averaged .30 over the period and did not exhibit any trends. (see Figure 9 below). The soybean-to-corn yield ratio was .34 in 2016 and .32 in 2017. Continue reading →
The taxable value on agricultural land declined 2.77 percent in 2018 according to the Nebraska Department of Revenue. Taxable value for all real property increased 0.96 percent, with residential and recreational property value growing 3.66 percent, and commercial and industrial property growing 6.94 percent. The decline in agricultural land values marks the second consecutive year taxable values have shrunk. Prior to last year, the taxable value on agricultural land had not declined since at least 1993, and perhaps as far back as the late 1980s. It may seem like a distant memory, but just three years ago, the taxable value of agricultural land statewide increased almost 20 percent. Since then, market values for land have declined between 15-20 percent and these declines are now being reflected in taxable values. Expect taxable values to continue to decline over the next few years due to the lag effect in how taxable values are set. Values are set using data on sales prices from the three years prior to the tax year for which the taxable values are being set.
Last week China issued a list of 106 U.S. products and goods, 37 of which are agricultural, that will face additional tariffs in retaliation to the April 3 announcement by the Trump Administration that the U.S. intends to enact tariffs on $50 billion of imports from China. The latest Chinese list includes soybeans, corn, and beef, the top three exports commodities from Nebraska, and are in addition to a list announced earlier which included added tariffs on pork and ethanol. Last Friday, it was revealed President Trump has instructed administration officials to investigate whether tariffs on another $100 billion of Chinese goods is warranted. Thus, it appears the U.S. and China are rapidly escalating to a full-fledged trade war. Continue reading →
The value of Nebraska’s 2017 corn crop is $5.55 billion and the soybean crop is $2.95 billion according to recent USDA National Agricultural Statistics Service (USDA-NASS) estimates. The corn production value is third-highest in the nation, falling behind Iowa at $9 billion and Illinois at $7.7 billion, and the soybean crop value is the fifth-largest. The figure below shows the values of Nebraska’s corn and soybean crops since 2010. The 2017 corn crop value is lower compared to 2016, but the soybean crop value is slightly higher. The corn crop value exceeded $9 billion in 2011, but has since fallen to where it has been around $6 billion or less in recent years. On the other hand, the value of the soybean crop has consistently hovered around $3 billion through the years. The drop in corn prices and acres in production are both reflected in the lower crop values for corn. Soybean prices have also come down, but increases in acres and higher yields have mitigated the effects on overall crop value. Continue reading →
The U.S. trade deficit with the rest of the world has been getting a lot of attention lately. In January, the deficit was estimated to be $56.6 billion, the highest level in nearly a decade. President Trump believes the trade deficit is bad and argues the U.S. is losing to other countries with which it trades. Accordingly, he believes the U.S. must renegotiate trade agreements and enact tariffs on imported goods to rectify the large deficits. The President’s arguments raise two questions: Are trade deficits inherently bad? And, is the U.S. losing to the rest of the world by having such large trade deficits? Continue reading →
A contemplated change in how the Renewable Fuel Standard (RFS) is implemented could cost Nebraska corn producers $421 million. A policy brief by the Iowa State University, Center for Agriculture and Rural Development (CARD), suggests the policy change, a cap on the prices of Renewable Identification Numbers (RINs), could result in a price loss for corn of 25 cents per bushel. A 25-cent loss in price would equate to a loss in the value of Nebraska’s corn crop of $421 million, or 7.6 percent, based on the 2017 estimated crop value of $5.5 billion.
“The Big Mac and the Dollar” may read a bit like the title of a children’s fairy tale (i.e. Jack and the Beanstalk), but it isn’t. Instead, it’s an agricultural economist’s not-so-clever way of introducing a discussion on the value of the dollar. Nebraska agriculture relies on exports, and the value of the dollar is a key determinant in determining the competitiveness of Nebraska agricultural products in international markets.