Publications

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  • Supply Response Under the 1996 Farm Act and Implications for the U.S. Field Crops Sector

    TB-1888, September 21, 2000

    The 1996 Farm Act gives farmers almost complete planting flexibility, allowing producers to respond to price changes to a greater extent than they had under previous legislation. This study measures supply responsiveness for major field crops to changes in their own prices and in prices for competing crops and indicates significant increases in responsiveness. Relative to 1986-90, the percentage increases in the responsiveness of U.S. plantings of major field crops to a 1-percent change in their own prices are: wheat (1.2 percent), corn (41.6 percent), soybeans (13.5 percent), and cotton (7.9 percent). In percentage terms, the increases in the responsiveness generally become greater with respect to competing crops' price changes. The 1996 legislation has the least effect on U.S. wheat acreage, whereas the law may lead to an average increase of 2 million acres during 1996-2005 in soybean acreage, a decline of 1-2 million acres in corn acreage, and an increase of 0.7 million acres in cotton acreage. Overall, the effect of the farm legislation on regional production patterns of major field crops appears to be modest. Corn acreage expansion in the Central and Northern Plains, a long-term trend in this important wheat production region, will slow under the 1996 legislation, while soybean acreage expansion in this region will accelerate. The authors used the Policy Analysis System-Economic Research Service (POLYSYS-ERS) model that was jointly developed by USDA's Economic Research Service and the University of Tennessee's Agricultural Policy Analysis Center to estimate the effects of the 1996 legislation.

  • Switching the Payment Trigger for an Area-Based Revenue Program Could Increase Participation

    Amber Waves, March 01, 2012

    The ACRE program relies on State- and farm-level revenue payment triggers to provide producers with an alternative to price-based and direct payment commodity programs. Switching from a State-level trigger to one closer to the farm level would generally increase expected payments, but the impact would vary by crop, region, and market prices.

  • Tax Policy Can Alter Farm Asset Investment Decisions

    Amber Waves, November 06, 2017

    Farming requires a substantial investment in assets such as barns, machinery, and equipment. Two IRS provisions, section 179 and bonus depreciation, allow farms (and all businesses) to deduct the cost of these assets in their first year of service. These deductions can be used together to accelerate the recovery of the asset’s cost, thereby reducing a farmer’s taxable income sooner than otherwise.

  • Tenure, Ownership and Transition of Agricultural Land (TOTAL) Survey 2014: A New USDA, Economic Research Service/National Agricultural Statistics Service Data Product

    Amber Waves, November 02, 2015

    Of the 911 million acres of land in farms in the contiguous 48 states, 61 percent (557 million acres) is operated by the land owner, according to the 2014 Tenure Ownership and Transition of Agricultural Land (TOTAL) survey. Eight percent (70 million acres) is rented from other farm operators and 31 percent, or 283 million acres, is rented from “non-operating landlords."

  • The 2002 Farm Act: Provisions and Implications for Commodity Markets

    AIB-778, November 14, 2002

    The Farm Security and Rural Investment Act of 2002 (2002 Farm Act), which governs agricultural programs through 2007, was signed into law in May 2002. This report presents an initial evaluation of the new legislation's effects on agricultural commodity markets, based on sectorwide model simulations under alternative policy assumptions. The analysis shows that loan rate changes under the marketing assistance loan program of the 2002 Farm Act initially result in an increase in total planted acreage of eight major program crops. This increase in plantings, however, is relatively small (less than 1 percent), partly due to the inelasticity of acreage response in the sector. In the longer run, the simulations indicate that overall plantings of the eight program crops studied are lower under the 2002 Farm Act than under a continuation of the 1996 Farm Act. This result mostly reflects larger enrollment in the Conservation Reserve Program and increased plantings of dry peas and lentils, although planted acreage for the eight program crops is reduced by less than 0.6 percent. The effects of the 2002 Farm Act on the livestock sector and retail food prices are relatively small. Farm income is increased, mostly due to higher government payments to the sector under the new law.

  • The 2002 Farm Bill: Provisions and Economic Implications

    AP-022, January 23, 2008

    The Farm Security Act of 2002, which governs Federal farm programs for 2002-07, was signed into law on May 13, 2002. This publication presents an overview of the Act and a side-by-side comparison of 1996-2001 farm legislation and the 2002 Act. For selected programs, information is provided to additional analyses of key changes, program overview, and economic implications.

  • The 2008-09 Recession and Recovery Implications for the Growth and Financial Health of U.S. Agriculture

    WRS-1201, May 22, 2012

    U.S. agriculture was better positioned than most U.S. industries entering the recession, was less affected by the recession than most other U.S. industries, and is well positioned to continue to do well in the years ahead.

  • The 2008/2009 World Economic Crisis: What It Means for U.S. Agriculture

    WRS-09-02, March 30, 2009

    The world economic crisis that began in 2008 has major consequences for U.S. agriculture. The weakening of global demand because of emerging recessions and declining economic growth result in reduced export demand and lower agricultural commodity prices, compared with those in 2008. These, in turn, reduce U.S. farm income and place downward pressures on farm real estate values. So far, the overall impact on U.S. agriculture is not as severe as on the broader U.S. economy because the record-high agricultural exports, prices, and farm income in 2007 and 2008 put U.S. farmers on solid financial ground. Moreover, the debt equity ratios in agriculture tend to be more conservative than those in most other sectors of the economy. There is much uncertainty concerning the depth and extent of the crisis. The outcomes for U.S. agriculture are dependent on whether or not there is a global realignment of exchange rates to correct current macroeconomic imbalances.

  • The Changing Economics of U.S. Hog Production

    ERR-52, December 27, 2007

    ERS examines the economic factors that underlie the dramatic decline in number of hog operations over the past 15 years and the increasing concentration of production on large, specialized hog farms.

  • The Changing Organization of U.S. Farming

    EIB-88, December 02, 2011

    Using survey and census data, ERS examines how changes in farm input use, business arrangements, structure, and production practices since the 1980s combined to expand output without increasing the total use of inputs.

  • The Debt Finance Landscape for U.S. Farming and Farm Businesses

    AIS-87, November 16, 2009

    Income and wealth for farm businesses have changed noticeably this decade. Debt levels have been rising, asset levels have outpaced debt despite a recent fall in land prices, and equity has more than doubled for farm businesses. However, recent declines in farm income and falling land prices have raised concerns about the financial position of U.S. farms. Total farm sector debt reached a record $240 billion in 2008, a $26-billion increase over 2007. Debt is expected to decline to $234 billion in 2009. The distribution of debt among farm operators has also been changing. In 1986, nearly 60 percent of farms used debt financing. By 2007, the number had dropped to 31 percent. In essence, farm debt has become more concentrated in fewer, larger farm businesses. Lenders and farm operators indicate that real estate accounts for the largest use of farm debt. Debt repayment capacity utilization (DRCU) of farm operators has dropped since the 1980s. DRCU dropped from 27 percent in 2000 to 22 percent in 2007. Larger farms are more likely to use more of their debt capacity.

  • The Diverse Structure and Organization of U.S. Beef Cow-Calf Farms

    EIB-73, March 28, 2011

    The beef cow-calf industry is characterized by large numbers of small farms, although large farms account for most of the production. Operators of beef cow-calf farms have varying goals for their cattle enterprises.

  • The Dodd-Frank Wall Street Reform and Consumer Protection Act: Changes to the Regulation of Derivatives and their Impact on Agribusiness

    AIS-89, November 10, 2010

    The Dodd-Frank Wall Street Reform and Consumer Protection Act makes significant changes to Federal regulation of the U.S. over-the-counter (OTC) derivatives market, with the goals of improving market transparency and reducing systemic default risk. This article reviews some important features of the new law and discusses their potential impact on agribusiness, much of which will depend on how the rules are written and implemented by regulators.

  • The Economic Organization of U.S. Broiler Production

    EIB-38, June 30, 2008

    ERS describes the boiler industry's organization, use of production contracts, animal housing features, enterprise cost structures, and farm household finances.

  • The Economics of Glyphosate Resistance Management in Corn and Soybean Production

    ERR-184, April 30, 2015

    Corn and soybean growers have an economic incentive to encourage neighbors to manage (rather than ignore) weed resistance to the herbicide glyphosate.

  • The Effects of the Margin Protection Program for Dairy Producers

    ERR-214, September 06, 2016

    The Margin Protection Program for Dairy Producers offers protection when the difference between the U.S. all-milk price and the estimated average feed cost falls below an elected level. The program's potential impacts on average margins and risk at different levels of coverage for both the protected margin ($4-$8 per cwt) and the share of production covered (25-90%) are estimated for 13 regions.

  • The Ethanol Decade: An Expansion of U.S. Corn Production, 2000-09

    EIB-79, August 18, 2011

    ERS examines how the farm sector reacted to increased demand for corn needed to fuel a 9-billion-gallon rise in ethanol production in the past decade. In the United States, corn is the primary ethanol feedstock.

  • The Evolving Distribution of Payments From Commodity, Conservation, and Federal Crop Insurance Programs

    EIB-184, November 30, 2017

    Changes in U.S. agricultural structure have changed the distribution of Government farm payments over time. Commodity program payments, some conservation program payments, and Federal crop insurance indemnities have shifted to larger farms.

  • The Future of Environmental Compliance Incentives in U.S. Agriculture

    EIB-94, March 14, 2012

    If direct payment programs, which are now subject to environmental compliance, are reduced or eliminated, what would be some impacts of applying environmental compliance provisions to crop insurance?

  • The Importance of Farm Program Payments to Farm Households

    Amber Waves, June 01, 2007

    Less than half of all farms-43 percent in 2005-receive farm program payments. Large family farms represent 8 percent of all farms but they receive 58 percent of commodity program payments going to farms. Two-thirds of recipient farms receive less than $10,000 in payments, accounting for only 7 percent of their gross cash farm. Payments represent 13 percent of gross cash farm income for those that receive more than $30,000 in payments.