ERS Charts of Note
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Monday, April 22, 2013
Existing conservation and farm commodity programs serve multiple purposes. Commodity-based income programs are intended to support farm families historically involved in the production of targeted “program” crops. Conservation payments, on the other hand, are designed to promote environmentally beneficial changes in farmland use or production practices. Conservation payments are available to a much wider range of producers, with nearly all crop and livestock producers eligible for at least one conservation program. In 2011, roughly 31 percent of all U.S. farms received commodity payments, conservation payments, or both. Only 6 percent of farms, however, received both commodity and conservation payments. Fifty-five percent of conservation payments went to farms that did not receive commodity payments, while 63 percent of commodity payments went to farms that did not receive conservation payments. Since 2004, the proportion of farms receiving both conservation and commodity payments has remained fairly constant. This chart updates one found in the March 2012 Amber Waves finding, Green Payments: Can Conservation and Commodity Programs Be Combined?
Monday, February 25, 2013
Agricultural productivity growth is a critical factor in controlling the economic and environmental costs of feeding the world’s growing population. New ERS research finds that agricultural productivity in Sub-Saharan Africa has been growing by about one percent per year since the 1980s. A major driver has been adoption of new agricultural technologies developed through agricultural research. Investment by the CGAIR Consortium of international agricultural research centers has been particularly important, providing about $6 in productivity impacts for every $1 spent by these centers on research. However, rates of new technology adoption and agricultural productivity in Sub-Saharan Africa are still low relative to other developing countries. Resource degradation, policies that reduce economic incentives to farmers, the spread of HIV/AIDS, armed conflicts, and low national research and extension capacity have hindered agricultural productivity improvement in the region. This chart is based on the ERS report, Resources, Policies and Agricultural Productivity in Sub-Saharan Africa, ERR-145, released February 2013.
Thursday, January 17, 2013
Gains are predicted in all livestock categories except hogs and dairy. Receipts for cattle and calves are predicted to increase in 2012 reflecting large anticipated price increases for cattle and veal in 2012. The slight decline predicted in hog receipts reflects a forecast decline in the hog annual price. Cash receipts for dairy are expected to decline despite USDA expectations of more milk cows producing more milk per cow in 2012. The average annual price of milk, despite recent gains, is expected to remain lower than in 2011. Increased broiler cash receipts reflect USDA expectations of price increases. Turkey receipts are also expected to benefit from higher prices in 2012. Chicken egg receipts are forecast to increase reflecting more eggs sold at a higher annual average price. This chart appeared in the Farm Sector Income & Finances topic page on the ERS website, updated November 2012.
Friday, December 28, 2012
Because of the USDA’s broad definition of a farm, the population of farm households is economically diverse. In 2011, households of the principal operators of commercial farms—farms with annual gross sales of $250,000 or more—had a median total income of $127,009 and a median income from farming activities of $84,649. In contrast, households associated with intermediate farms—those with less than $250,000 in sales whose principal operators considered farming their primary occupation—typically have a loss from farming. The same is true for households of rural residence farms, defined as having less than $250,000 in sales but whose principal operator’s primary occupation is not farming. The typical intermediate and rural residence farm household experienced similar losses from farming, but rural residence farm households had higher median total income ($61,260 compared with $45,889) because of greater off-farm income. Of the three types of farm households, only intermediate farm households had a lower median total income than U.S. households overall ($45,889 compared with $50,054). This chart is based on data found in the Farm Household Well-being topic page on the ERS website, updated November 2012.
Tuesday, December 11, 2012
Although 2012 average net cash income (NCI) for all farm businesses is expected to stay near its 2011 level, many farm businesses are expected to experience large changes. Farm businesses that specialize in mixed grains; wheat; and soybeans and peanuts are expected to experience a 24- to 28-percent increase in average NCI due to strong grain prices and insurance indemnities. Beef cattle farm businesses are forecast to experience a 12-percent increase in average NCI, while declining hog and milk prices and increasing feed expenses are contributing to an expected 16-percent decline in average NCI for hog farm businesses and an almost 51-percent decline for dairy farm businesses. Farm businesses are defined as operations with sales of over $250,000 or smaller operations where farming is reported as the operator's primary occupation; collectively, they represent 42 percent of all U.S. farm operations. This chart is based on data found in the November 27, 2012 update of the Farm Sector Income & Finances topic page on the ERS website.
Friday, December 7, 2012
The debt-to-equity ratio and the debt-to-asset ratio are major indicators of the financial well-being of the farm sector. The debt-to-equity ratio measures the relative proportion of funds invested by creditors (debt) and owners (equity). The debt-to-asset ratio measures the proportion of farm-business assets that are financed through debt. Lower ratios signify that farmers are relying less on borrowed funds to finance their asset holdings. The farm sector’s debt-to-asset ratio is expected to decline from 10.7 percent in 2011 to 10.5 percent in 2012. The debt-to-equity ratio is also forecast to decline, from 11.9 percent in 2011 to 11.7 percent in 2012. The steady decline in both ratios since the mid-1980s is due to relatively large growth in the value of farm assets (driven principally by increases in farm real estate values), while farm-debt levels increased at a much slower pace. This chart is from the Farm Sector Income & Finances topic page on the ERS website, updated November 27, 2012.
Monday, November 26, 2012
Direct payments are farm program payments that are based on historical cropping patterns of major commodities, or "base acres," with per-acre rates fixed in legislation and not linked to current production or market prices. Direct payments per acre vary significantly by commodity. In 2008, rice and peanuts received the largest direct payments per acre ($96.25 and $45.85, respectively). Rice base acres were predominant in a few counties along the Gulf Coast and in the Pacific region, while peanut base acres were concentrated in the Southeast. Corn, wheat, and soybeans accounted for more than 80 percent of total base acres in 2008, but received lower direct payments per acre ($24.39 per acre, $15.21 per acre, and $11.54 per acre, respectively). Corn base acres dominated in the Corn Belt, Lake States, the Northeast and Appalachia while wheat base acres were prevalent in the Northern and Southern Plains as well as parts of the Mountain region. This chart is found in the ERS report, Potential Farm-Level Effects of Eliminating Direct Payments, EIB-103, November 2012.
Thursday, November 8, 2012
Direct payments are based on historic acreage and yields of program crops like corn and wheat and are often considered "decoupled" because they do not depend on a farmer's current production decisions. Nonetheless, because direct payments are linked to past production of program crops and because productive areas tend to remain productive over time, areas that currently have higher average yields and more acreage of program crops tend to receive more payments than areas with lower yields and fewer acres. This positive association between direct payments and production of program crops raises doubts about whether direct payments really are decoupled from current production decisions. The 2002 Farm Act authorized direct payments for the first time for oilseed crops, such as soybeans, triggering a sudden shift in direct payments toward areas with higher average production of oilseeds. By studying oilseed producers' response to the shift in payments between 2002 and 2007, ERS researchers found that direct payments had little effect on production decisions This chart appears in "Expansion in Direct Payments Did Not Lead to More Crop Production" in the September 2012 issue of ERS's Amber Waves magazine.
Monday, October 15, 2012
Government payments paid directly to producers are expected to total $11.1 billion in 2012, a 6.3-percent increase over the 2011 program payments. Direct payments under the Direct and Countercyclical Program (DCP) and the Average Crop Revenue Election Program (ACRE) are forecast at $4.96 billion for 2012. This 5.4-percent increase in direct payments in 2012 over 2011 is largely due to the fact that the percentage of base acres on which direct payments are made increased from 83.3 percent for the 2011 crop year to 85.0 percent for the 2012 crop year. This chart is from the Farm Sector Income & Finances topic page on the ERS website.
Monday, July 16, 2012
Federal farm program payments help encourage good stewardship of natural resources through environmental compliance requirements. To maintain eligibility for most farm programs, farmers must follow an approved soil conservation plan on all highly erodible land used for crop production. Farmers who do not comply with these requirements, even on a small number of acres, risk losing some or all of their Federal farm commodity, conservation, and disaster payments, as well as access to Federal farm loan and loan guarantee programs. Since 2003, annual farm program payments subject to environmental compliance have fluctuated between $11 billion and $20 billion. Most of the variation can be attributed to countercyclical payments (CCP) and marketing loan benefits (MLB), which are triggered by low crop prices. Since 2007, high prices for most program crops have sharply reduced CCP and MLB payments from their 2005-06 levels. Direct payments have accounted for roughly half of the compliance incentive since 2008. If they are eliminated in the 2012 farm bill, farmers who do not receive conservation or disaster payments (the other major payments subject to environmental compliance) may have less incentive to continue meeting compliance requirements unless these payments are replaced by another type of commodity or insurance program subject to compliance. This chart appeared in the June 2012 issue of Amber Waves magazine.
Tuesday, April 24, 2012
Under the Average Crop Revenue Election (ACRE) program, farmers receive revenue-based payments if yields and/or prices fall below ACRE triggers but give up 20 percent of direct payments, receive no countercyclical payments, and face reduced marketing assistance loan rates. The 2009 Agricultural Resource Management Survey (ARMS) queried farmers as to their reasons for choosing to enroll or not in the ACRE program. About 10 percent of almost 500,000 farmers who gave explicit reasons for their enrollment decision did enroll in ACRE. The reason most frequently cited for enrolling in ACRE was the expectation that no CCPs would be received, followed by anticipation of high guaranteed prices and concerns about farm income variability. Of the 442,000 farmers who chose not to enroll in the ACRE program, an equal percentage cited the complexity of the ACRE program and anticipated foregoing CCPs as their reason. Another 20 percent of those not enrolling said they were waiting for neighboring farmers to join. This chart is found in Agricultural Income and Finance Outlook, AIS-91, December 2011.
Monday, May 9, 2011
While the Direct and Counter-cyclical Program and Federal crop insurance are both part of the farm safety net, they do not necessarily serve the same farmers. Looking at counties that received at least $20 in direct payments per cropland acre in 2008, or $20 in crop insurance indemnity payments averaged over 2007 to 2009, clear geographic patterns emerge. Direct payments tend to be higher in the Corn Belt (corn and soybeans), Mississippi Delta (cotton and rice), and the Texas-Louisiana Gulf Coast (cotton and rice). They are also high in Arizona (cotton), California (cotton and rice), and parts of the Southern Atlantic Seaboard. Crop insurance indemnity payments tend to be higher in the wheat-growing regions in the Northern Plains and parts of the Southern Plains, as well as North and South Carolina. Both programs are high in the Texas Panhandle (cotton and wheat) and across Alabama and Georgia (cotton and peanuts). This chart appeared in the December 2010 release of the Agricultural Income and Finance Outlook, AIS-90.