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Fertilizer share of expected corn production expenses drops back after 2021–22 spike

Wednesday, March 27, 2024

Fertilizer is one of several inputs corn growers buy in the months before April and May, when most U.S. corn acres are planted. Historically, fertilizer is typically the largest variable expense associated with corn production. Every May, USDA’s Economic Research Service (ERS) reports production costs, including fertilizer, for corn and other major commodities in the Commodity Costs and Returns data product. Although fertilizer costs have varied over time, the average cost of fertilizer per acre from 2006 to 2021 was around $125, not adjusting for inflation. Costs jumped to an average of $225.78 per acre in 2022, and then fell to an estimated $186.73 in 2023. This represents an 89-percent increase from 2021 to 2022 followed by a decrease of 17 percent from 2022 to 2023. In addition to fertilizer expenses, other costs of production reported in the data include operating costs, such as seed, fuel, and chemicals, as well as allocated overhead costs, such as labor, capital recovery of machinery, and the opportunity cost of land—a category that reflects rent or income that might have been earned from renting out the land when the land is owned. Fertilizer costs accounted for about 22 percent of total corn production costs per acre from 2006 to 2016, then fell to historical lows averaging around 17 percent from 2017 to 2021. In 2022, price spikes resulted in fertilizer costs jumping to about 24 percent of total costs. While elevated, fertilizer expenses as a share of total costs remained lower in 2022 compared with 2008, when they were 26 percent of total costs. From 2022 to 2023, total corn production costs remained elevated compared with 2021 and before, even as fertilizer costs declined. Iowa prices published by USDA’s Agricultural Marketing Service for the most commonly used fertilizers anhydrous ammonia, urea, and liquid nitrogen (32 percent) show decreases from 2023 to 2024, with slight upticks in the second reporting period of February. Cost of production data for 2023 is set to be released on May 1, 2024. This chart is drawn from the ERS Commodity Costs and Returns data product.

Iowa leads States in hog production

Wednesday, March 13, 2024

Iowa is the top producer of hogs in the United States, with about $10.9 billion in cash receipts in 2022. Cash receipts represent the value of sales of hogs by farmers to processors or final users. Following Iowa are Minnesota, North Carolina, and Illinois, with cash receipts of $3.6 billion, $3.1 billion, and $2.1 billion, respectively. Iowa accounted for about 35.5 percent of the $30.6 billion in total U.S. cash receipts for hogs in 2022. The top 10 hog-producing States cumulatively accounted for 87.6 percent of hog receipts. The latest Hogs and Pigs report from USDA, National Agricultural Statistics Service indicated there were nearly 75 million hogs in the United States as of December 1, 2023. USDA, Economic Research Service (ERS) estimates farm sector cash receipts—the cash income received from agricultural commodity sales—three times each year. These data include estimates broken down by State and commodity and offer background information on the Nation’s agriculture. The information in this chart is available in the ERS Farm Income and Wealth Statistics data product, updated in February 2024.

Emergency Relief Program payments aiding U.S. crop producers concentrated in North Dakota and Texas

Wednesday, January 24, 2024

In 2020 and 2021, the United States experienced 42 disaster events that each resulted in damages of at least $1 billion, including hurricanes, drought, and wildfires. The Emergency Relief Program (ERP) provides funds to assist commodity growers who suffered losses from natural disasters in 2020 and 2021. As of January 2023, cumulative payments made through the ERP totaled $7.3 billion. USDA disbursed a large portion of this total, $1.16 billion, to North Dakota producers of corn ($322 million), soybeans ($309 million), and wheat ($268 million) who experienced flooding in 2020 and drought in 2021. Texas producers also received a sizable portion of payments, with cotton farmers receiving $510 million of the $909 million disbursed in that State. Producers in North Dakota and Texas received most ERP payments for losses in revenue, quality, or production as a result of moisture and drought that occurred during the 2020 and 2021 crop years. The remaining top States receiving ERP payments were South Dakota ($567 million), Minnesota ($463 million), and Iowa ($408 million), which, together with North Dakota and Texas, represented approximately 48 percent of the total ERP payments disbursed as of January 2023. In early 2023, USDA launched a second phase of the ERP program, but disbursements from this phase are not included in these totals. This chart first appeared in the USDA, Economic Research Service report U.S. Agricultural Policy Review, 2022, published in November 2023.

Value of U.S. milk production reaches $59 billion in 2022

Thursday, January 11, 2024

U.S. milk production, as measured in inflation-adjusted 2023 dollars, grew $13.0 billion (or 28 percent) to $59.2 billion in 2022, the highest level since 2014, according to data from the USDA, Economic Research Service (ERS). ERS annually estimates farm sector cash receipts—the cash income received from agricultural commodity sales. This increase in receipts coincided with the U.S. all-milk price rising to $26.46 per hundredweight, a 28.6-percent gain from 2021. The all-milk price is a gross price dairy farmers receive per hundredweight of milk sold and does not include deductions for items like transportation charges, promotion costs, or co-op dues. In 2014, cash receipts for milk reached an all-time high of $62.4 billion once adjusted for inflation, about 5 percent more than the 2022 total. This chart was created using information found in the ERS Farm Income and Wealth Statistics data product updated in November 2023. Estimates of 2023 milk receipts will be released in August 2024.

Recent rice and fertilizer price surges affected U.S. rice farming profitability

Thursday, January 4, 2024

According to data from USDA’s Economic Research Service (ERS), recent returns from rice farming are positive, on average. From 2012 to 2022, U.S. rice farmers received a positive net return (equal to the value of production minus costs) in all years except 2016, when rice fell to its lowest price of that decade. The total gross value of producing one acre of rice increased 23 percent over that time, ranging from a low of $863.46 in 2016 to a high of $1,439.19. This was, in part, because of strengthening rice prices. Notably, rice prices surged in recent years before reaching an all-time high in 2022. Over the 2012 to 2022 period, the total cost of producing one acre of rice increased by 36 percent. Most of the increase in cost stemmed from an increase in operating costs of 62 percent, while allocated overhead costs increased 6 percent. Surging fertilizer costs, which increased by $150.75 per acre from 2020 to 2022, largely drove the increase. By contrast, allocated overhead costs—a category that includes labor costs and the opportunity cost of land—increased by $12.09 since 2020. This chart is based on data collected from the ERS Commodity Costs and Returns data product.

Genetically engineered crops continue to dominate soybean, cotton, and corn acres planted by U.S. farmers

Tuesday, January 2, 2024

Genetically engineered (GE) seeds were commercially introduced in the United States for major field crops in 1996, with adoption rates increasing rapidly in the years that followed. The two main GE trait types are herbicide-tolerant (HT) and insect-resistant (Bt). These traits can be added individually to seeds as well as combined into a single seed, called stacked seed traits. USDA, Economic Research Service (ERS) reports information on GE crops in the data product Adoption of Genetically Engineered Crops in the U.S. These data show that by 2008, more than 50 percent of corn, cotton, and soybean acres were planted with at least one GE seed trait. Today, more than 90 percent of corn, cotton, and soybean acres are planted using at least one GE trait. Traits other than HT and Bt have been developed, such as resistance to viruses, fungi, and drought or enhanced protein, oil, or vitamin content. However, HT and Bt traits are the most used in U.S. crop production. While HT seeds also are widely used in alfalfa, canola, and sugar beet production, most GE acres are occupied by three major field crops: corn, cotton, and soybeans. This chart appears in the ERS topic page Biotechnology, published in October 2023.

Two companies accounted for more than half of corn, soybean, and cotton seed sales in 2018–20

Monday, October 2, 2023

Two companies—Corteva and Bayer—provided more than half the U.S. retail seed sales of corn, soybeans, and cotton in 2018–20, the most recent period for which estimates are available. In recent decades, the U.S. crop seed industry has become more concentrated, with fewer and larger firms dominating seed supply. Today, four firms (Bayer, Corteva, ChemChina’s Syngenta Group, and BASF) control the majority of crop seed and agricultural chemical sales. In 2015, six firms led global markets for seeds and agricultural chemicals. The concentration can be traced to the expansion of intellectual property rights to private companies for seed improvements in the 1970s and 1980s, creating an incentive to research and develop new biotechnology seed traits and seed varieties. As biotechnology advanced, companies created genetically modified (GM) varieties of seed, such as herbicide-tolerant or insect-resistant corn, soybeans, and cotton. Mergers occurred between companies that produced and sold pesticides (primarily herbicides, insecticides, and fungicides), seed treatments (seed coatings to protect against insects or fungi), crop seeds, and seed traits. As a result, the U.S. crop seed sector has become highly integrated with agricultural chemicals and more concentrated. This chart is drawn from data in the USDA, ERS publication Concentration and Competition in U.S. Agribusiness, published in June 2023, and the Amber Waves article Expanded Intellectual Property Protections for Crop Seeds Increase Innovation and Market Power for Companies, published in August 2023.

Irrigated agricultural acreage has grown, shifting eastward, while western irrigated acreage has declined

Wednesday, September 27, 2023

U.S. irrigated agriculture has seen regional changes in the past two decades, influenced by a variety of factors. From 1997 to 2017, total U.S. irrigated agricultural acreage increased by 1.7 million acres. Irrigated acreage grew primarily in the eastern United States, where agriculture production is historically rain-fed, and declined in the West, where a generally arid climate necessitates irrigation for most crops. In the East, increased frequency and severity of drought have driven farmers to move from rain-fed to irrigated production. In the West, farmers have begun to take irrigated land out of production as surface water supplies dry up, and they face increasing competition for water from growing urban centers. This chart was drawn from the USDA, Economic Research Service report Trends in U.S. Irrigated Agriculture: Increasing Resilience Under Water Supply Scarcity, published in December 2021.

Intellectual property protections for new crop varieties have increased

Monday, September 25, 2023

Before 1970, most crop breeding was done in the public sector. Seed companies lacked incentives to invest in crop breeding because they had no legal mechanism to restrict unlicensed use of improved seed, except for hybrid seed, which could be protected through trade secrets. The 1970 Plant Variety Protection Act aimed to encourage seed companies to improve crop varieties beyond hybrid seed. That aim was cemented after several court rulings ensured the private sector could benefit from its research into new seed varieties and genetically modified traits. In the following years, the number of intellectual property rights, such as Plant Variety Protection certificates, plant patents, and utility patents, began to rise. Genetically modified varieties of corn, soybeans, and cotton were introduced in the United States in 1996 and became the dominant seed choice among farmers within a few years. From 2016 to 2020, a total of 5,137 plant patents, 5,010 utility patents, and 2,028 Plant Variety Protection certificates were issued for new crop varieties, more than double the rate of a decade earlier. This chart appears in the USDA, Economic Research Service publication Concentration and Competition in U.S. Agribusiness and the Amber Waves article Expanded Intellectual Property Protections for Crop Seeds Increase Innovation and Market Power for Companies.

Crop research and development spending tracks sales revenue by major seed companies

Monday, September 18, 2023

Total research and development (R&D) spending on crop improvement by the seven largest seed companies (as well as their legacy companies) increased from less than $2 billion in 1990 to more than $6.5 billion by 2021, closely tracking with increases in company revenues from seed and agrichemical sales. Intellectual property rights protections for new seed innovations—especially genetically modified seeds—allow seed companies to set prices for their products with a temporary legal monopoly. The profits earned are a return for R&D investments and costs to commercialize the inventions. These profits also allowed seed companies to spend more on crop R&D, accelerate the rate of new variety introductions with higher productivity potential, and charge higher prices reflecting the value of improved seeds. Collectively, these 7 companies have invested about 10 percent of their agricultural revenues in R&D. This chart appears in the USDA, Economic Research Service publication Concentration and Competition in U.S. Agribusiness, published in June 2023, and the Amber Waves article Expanded Intellectual Property Protections for Crop Seeds Increase Innovation and Market Power for Companies, published in August 2023.

Irrigation water delivery organizations play important role in conveying water in the western United States

Tuesday, September 5, 2023

Water is withdrawn from surface and groundwater sources for agricultural, industrial and municipal use. Farmers in the United States source water for irrigation by diverting it from on-farm surface water bodies like rivers or streams, directly pumping groundwater, or receiving water via the canals and ditches of water delivery irrigation organizations. In the four regions of the western United States (consisting of the Northwest (Idaho, Oregon, and Washington), Pacific (California and Nevada), Southwest (Arizona, New Mexico, Utah), and Eastern Rockies (Colorado, Montana, Wyoming) regions) irrigation water delivery organizations accounted for almost 60 percent of the water that is withdrawn for all uses in an average year. In contrast, in the High Plains (Kansas, Nebraska, North Dakota, Oklahoma, South Dakota, and Texas) and Southeast (Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, and South Carolina), where surface and ground water resources for irrigation are available without large-scale coordination, these organizations conveyed water that amounted to about 3 percent of all water withdrawn in an average year. Irrigation water delivery organizations play a particularly large role in the Southwest, where in 2019 they conveyed 11 million acre-feet of water, which is 73 percent of the 15 million acre-feet withdrawn for all uses in an average year. This chart appears in the ERS report Irrigation Organizations: Water Inflows and Outflows, published in August 2023.

Aerial imagery remains mostly grounded on U.S. farms

Thursday, August 24, 2023

Use of aerial imagery provided by aircraft, drones, and satellites remains limited on U.S. farms. USDA has tracked adoption of many agricultural production technologies through its annual Agricultural Resource Management Survey (ARMS) of U.S. farms. Farmers using drones and aircraft can survey large stretches of farm and ranch land. Aerial imagery helps identify land features or vegetation patterns that are more easily visible from above and thus aids in crop mapping, livestock monitoring, land surveying, crop spraying, and crop dusting. According to the most recent data for various row crops, aerial imagery was used on 7.0 percent of acres planted to corn in 2016 and 9.8 percent for soybeans in 2018. The adoption rate on winter wheat-planted acreage in 2017 was 3.5 percent, with comparable adoption in 2019 on cotton acres (2.8 percent) and sorghum (4.6 percent). For context, in 2016, these adoption rates were lower than those of related technologies like yield maps (43.7 percent) and soil maps (21.5 percent), which provide visualizations of how yields and soil properties vary within and across fields. The ongoing digitalization of U.S. agriculture presents considerable opportunities for improvement in farmers’ productivity, environmental footprint, and risk management. This chart appears in the USDA, Economic Research Service report Precision Agriculture in the Digital Era: Recent Adoption on U.S. Farms, published in February 2023.

Irrigation organizations in Pacific region more likely to trade water with other irrigation organizations

Monday, August 21, 2023

Irrigation water delivery organizations play a key role in delivering water to farms, ranches, and nonagricultural users in the United States. Results from the 2019 Survey of Irrigation Organizations (SIO) show that 2,477 organizations in western regions were directly involved in delivering water to farms. About 70 percent of the water withdrawn from freshwater sources for irrigation in the western regions of the United States is managed by irrigation water delivery organizations. In most regions, organizations that allow transfers internally between their users were more common than organizations engaging in external trades with other entities. Some of these organizations trade water by leasing it to or from other irrigation organizations, municipalities, environmental groups, or other interested parties. In the Pacific region, 17 percent of organizations engage in these external leases, compared to between 3 and 7 percent in other regions in the western United States. Water exchanges may also occur internally between water users within a delivery organization’s own water delivery system, if allowed by the organization. Internal transfers between users in an organization occurred in 5 percent of organizations in the Pacific and between 8 and 11 percent of organizations in other regions of the western United States. This chart appears in the USDA Economic Research Service publication Irrigation Organizations: Water Inflows and Outflows, published in August 2023.

Variable rate technology adoption is on the rise

Tuesday, August 15, 2023

Farmers use variable rate technologies (VRT) to control the amount of farm inputs—such as seed, fertilizer, and chemicals—applied as farm machinery moves across a field. With more precise control of inputs, farmers can make more efficient applications that might lower production costs or reduce environmental impacts. Data from USDA’s Agricultural Resource Management Survey (ARMS) show that initial adoption of VRT in the late 1990s and early 2000s was sluggish, remaining below 10 percent of planted acres for several field crops. However, adoption rates for corn and cotton have increased markedly over the last decade. The VRT adoption rate for corn stood at 37.4 percent of planted acres in 2016, up from 11.5 percent in 2005. Cotton acreage using VRT showed a similar increase, rising from 5.4 percent in 2007 to 22.7 percent in 2019. Recent VRT adoption rates across other crops included 13.9 percent for sorghum in 2019, 18.8 percent of winter wheat planted acres in 2017, and 25.3 percent of soybean-planted acres in 2018. VRT adoption follows a pattern common to other precision technologies: higher adoption by large farms and lower adoption among smaller farms, in part because larger farms can spread the fixed costs of adoption over greater production amounts. This chart and more information on the topic appear in the USDA, Economic Research Service report Precision Agriculture in the Digital Era: Recent Adoption on U.S. Farms, published in February 2023.

Federal projects provide nearly half of water conveyed by large irrigation water delivery organizations

Thursday, August 10, 2023

Irrigation water delivery organizations are entities such as irrigation districts and ditch companies that supply farmers, ranchers, and other users with water. These organizations draw water from several different sources. Water from Federal water projects and direct diversions from surface water bodies make up the majority of inflows to these organizations. Yet there is substantial variation across organizations based on size. Large water delivery organizations, (which supply water to more than 10,000 acres) tend to contract water from Federal water storage facilities rather than draw from natural surface sources such as rivers. However, small water delivery organizations (supporting less than 1,000 acres) draw a much higher proportion of their water inflows from surface sources. These differences reflect the historical development of irrigation organizations, with larger organizations developing in tandem with or as part of top-down approaches to provide water for irrigation, while small organizations developed from the ground up as small private ventures or community-led efforts. This chart appears in the USDA Economic Research Service publication Irrigation Organizations: Water Inflows and Outflows, published in August 2023.

More than half of harvested U.S. cropland uses seed varieties with at least one genetically modified trait

Monday, August 7, 2023

Genetically modified (GM) varieties of corn, soybeans, and cotton were introduced in the United States in 1996, and they became the dominant seed choice among farmers within a few years. Later, GM varieties were widely adopted for canola and sugar beets. By 2020 (the most recent year for which data are available), about 55 percent of the total harvested cropland in the United States was grown with varieties having at least one GM trait. The most prevalent GM traits are herbicide tolerance and insect resistance. Private seed companies lead the development of GM traits—a shift away from public institutions—stimulated by judicial rulings that created protections for intellectual property in crop genetics and other biological inventions. Advances in biotechnology provided a new means of improving crops by allowing genes with specific, inheritable traits to be transferred to distant crop varieties. GM seed use also is catching on in alfalfa, potatoes, papaya, squash, and apples. This chart appears in the USDA, Economic Research Service report Concentration and Competition in U.S. Agribusiness, published in June 2023.

Most manure applied to corn fields is not incorporated into the soil

Tuesday, July 25, 2023

Corn farmers most frequently apply manure to the soil surface without incorporating it, rather than using other methods. Manure types vary based on water content, such as lagoon liquid, slurry liquid, and dry or semi-dry. USDA, Economic Research Service (ERS) researchers found that irrespective of manure type, corn farmers used surface application most often, tending not to incorporate the manure with tillage afterward. With incorporation, manure is first spread on the soil surface and then mixed into the first few inches with a tillage implement, thus increasing its contact with the soil. Less than 30 percent of all surface-applied manure on corn fields is incorporated. Surface application without incorporating into the soil or applying manure through an irrigation system results in less nutrient retention and lower fertilizer value. Farmers gauge manure moisture content to determine which application method to use when addressing crop nutrient needs. On operations such as swine or dairy farms, it is common to use water to wash manure out of barns, creating lagoon and slurry liquid manure with a high water content. Liquid manure is usually applied to the land’s surface, but roughly 20 percent is injected into the soil using specialized equipment like a manure injector. Only a small portion of liquid manure stored in lagoons is sprayed through irrigation systems. Poultry and beef feedlot manures are typically dry or semisolid. Almost all dry or semisolid manures are surface applied. In 2020, more acres were planted to corn (90.8 million acres) in the United States than any other crop, and a larger percentage of corn acres (16.3 percent) received manure than any other crop. This chart appears in the ERS report Increasing the Value of Animal Manure for Farmers, published in March 2023.

Farmers mostly use manure sources from their own operations

Monday, July 24, 2023

In 2020, manure was applied to about 8 percent of the 240.9 million acres planted to 7 major U.S. field crops. Most manure applied to U.S. cropland (78 percent) comes from animals raised on the same operation, while 14 percent is purchased and 8 percent is obtained at no cost from other animal operations. USDA, Economic Research Service (ERS) survey data show that crop farmers received compensation from animal producers for taking manure for less than 1 percent of the manure applied, noted as “Obtained with compensation” in the chart. For most crops, farmers use manure that either comes from their own farm or at no cost from other farms. However, cotton and peanut producers are the most likely to purchase manure, typically from poultry growers. Among all animal manure types, poultry litter has the highest nutrient content, making it less costly to transport. Manure markets tend to be highly localized. When manure is obtained by a crop producer at no cost from the animal producer, that can indicate an excess supply of manure in the local area. Animal producers who apply their operations’ manure to their own crops account for a high proportion of manure used on oats, corn, and barley crops, followed by soybean and wheat. This chart appears in the USDA, ERS report Increasing the Value of Animal Manure for Farmers, published in March 2023.

Drought conditions have improved in much of the Western United States compared with the last two years

Wednesday, July 19, 2023

As of July 2023, drought conditions have improved across much of the Western United States (consisting of Arizona, California, Colorado, Idaho, Kansas, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington, and Wyoming) compared not only with earlier in the year, but also with 2021 and 2022. According to the U.S. Drought Monitor, on July 11, 2023, 3 percent of land in the Western States was classified as experiencing extreme or exceptional drought, with an additional 8 percent classified as severe. This is down from June 2023, when 18 percent of land in Western States was classified as in extreme or exceptional drought. Significant precipitation and snowpack accumulation over the 2022–2023 winter and spring has reduced the prevalence of drought in the area, notably in California. However, conditions remain dry in Kansas and Nebraska where severe or worse drought conditions affect 55 and 48 percent of land, respectively. Data reported by U.S. Drought Monitor show Western drought conditions intensified during summer 2021, then gradually subsided between October and December 2021. They intensified again during the first half of 2022 before starting to subside again. For agriculture, drought means diminished crop and livestock outputs and reduced profitability if adaptive measures such as irrigation are not used. Drought also reduces the quantity of snowpack and streamflow available for diversions to irrigated agricultural land. These impacts can reverberate throughout local, regional, and national economies. Find additional information on the USDA, Economic Research Service’s Newsroom page Drought in the Western United States.

Large family farms faced less risk in 2021 based on the operating profit margin ratio

Thursday, July 13, 2023

Large family farms were more likely to have stronger financial performance than other farms, according to USDA, Economic Research Service (ERS) researchers reporting data from the 2021 Agricultural Resource Management Survey (ARMS). ERS researchers measured financial performance using operating profit margin (OPM), the ratio of operating profit to gross farm income. They categorized farms as low risk if they had an OPM larger than 25 percent. Large-scale family farms, defined as those with gross cash farm income (GCFI) of $1 million or more, were the most likely to have low-risk operating profit margins compared with nonfamily and family farms of other sizes. The share of large-scale family farms considered low risk was 54 percent in 2021, an increase from 48 percent in 2020. The large-scale category includes very large farms, with GCFI of $5 million or more. Large-scale family farms make up 3 percent of U.S. farms but contributed 46 percent of the value of production in 2021. Small family farms, those with GCFI less than $350,000, were less likely to have an operating profit margin over 25 percent. Small family farms represent 89 percent of U.S. farms and contributed 18 percent of the value of production. This chart appears in the ERS report America’s Farms and Ranches at a Glance, published in December 2022, and Examining Financial Risk Measures on Family and Nonfamily Farms, published in Amber Waves in June 2023.