FarmPolicy

September 16, 2019

ERS: Positive grower returns have supported growth in U.S. corn area

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From USDA’s Economic Research Service (ERS), May 6- “Positive grower returns have supported the expansion of U.S. corn area since the late 2000s. Returns to corn production—the value above total economic costs that include opportunity costs of land, labor, and other owned resources—have been positive since 2007. Returns reached a high of $224 per planted acre in 2011 before declining to $48 in 2013. With economic profit available from corn production, planted corn acres increased nearly 25 percent nationally from about 78 million in 2006 to a record of more than 97 million in 2012. In 2013, however, lower corn price expectations pushed down planted area, and lower corn prices, along with higher land costs, reduced returns to corn production. From 1997 to 2006, economic returns to corn production had been negative, averaging -$74 per planted acre. During this time, planted corn acreage was relatively stable between about 75 and 80 million acres. This chart is based on data found in Commodity Costs and Returns and the Feed Grains Database.”

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Farm Bill; Ag Economy; Biotech; Egg Standards; and, Regulations

Farm Bill- Conservation, Crop Insurance, Commodity Programs

An Amber Waves update yesterday (USDA- Economic Research Service (ERS)) stated that, “The Agricultural Act of 2014, also known as the 2014 Farm Act or Farm Bill, continues a strong overall commitment to conservation. However, unlike the previous two Farm Acts passed by Congress in 2002 and 2008, the 2014 Farm Act does not include an increase in overall funding for conservation programs. Between 2014 and 2018, the Congressional Budget Office (CBO) estimates mandatory conservation spending of $28 billion, about $200 million less than CBO’s projection of 2014-18 spending if the programs and provisions of the 2008 Farm Act had been extended. Although most conservation programs receive ‘mandatory’ funding (funding that is required by law and does not require an annual appropriation), the funding levels are not guaranteed and could be revised in future years [related graph].”

The Amber Waves update noted that, “The trend toward greater funding for working land programs recognizes that agri-environmental problems cannot be addressed entirely through land retirement. Land retirement programs, even at peak acreage, included roughly 10 percent of U.S. cropland. Soil erosion, nutrient and pesticide runoff, and other resource concerns require a broader approach involving a larger share of agricultural land. USDA data shows that by the end of 2013, more than 280 million acres of agricultural land (including grazing land and other non-cropland) had been enrolled in a USDA working land program at some time. Policy-makers also recognized that conservation practices on working land could often address these issues at a lower cost when compared to land retirement [related graph].”

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