Download the full 2024 Journal of the ASFMRA here
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By Christopher N. Boyer, W. Hence Duncan, and Eunchun Park
The prevented planting provision in United States crop insurance reimburses producers when they are unable to plant. These indemnities are calculated by using a coverage factor (CF) of the insurance level. We simulated CFs that reimburse land rent and two payment values for inputs for corn and soybean production. Simulations were established to generate county-level distributions of CFs as well as changes in U.S. expenditures if the CFs were established to reimburse land rent and input costs. We found that the CF for corn is likely compensating claims more than the soybean CF, despite the soybean CF being higher than corn.
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By Xiaowei Cai, Richard Volpe, and Fernando Barraza
The specialty crop industry in California is still adapting to the ever-changing circumstances in the aftermath of the COVID-19 outbreak, including labor shortage and market disruptions. This article utilizes secondary data to shed light on the most recent trends in farmland values for specific fruits and tree nuts in the state, as well as the various factors that may impact farmland values. These factors encompass crop yield, production levels, and a range of macroeconomic indicators. Subsequently, we employ correlation analyses to furnish evidence indicating that the degree of association between farmland values in California and these factors differs depending on the type of commodity.
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By Alicia Mattke, Kristiana Hansen, Dannele Peck, Vivek Sharma, Scott Miller, and Christopher Bastian
The southeastern portion of Wyoming is an agriculture-dependent area that relies heavily on groundwater from the High Plains Aquifer to grow crops. Like other states across the High Plains region, withdrawal rates in this area are higher than recharge rates, causing groundwater levels to decline. This study uses annual and intra-seasonal farm-level dynamic optimization models to determine whether water-use efficiency (WUE) technologies—specifically soil moisture sensors—can be beneficial to producers if water availability became more limited in the future. Results indicate that WUE technologies can help producers minimize financial losses that might otherwise occur from reduced water availability.
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By Joseph P. Janzen
Commodity price variability is a major component of fluctuations in net farm income. Farm managers assume some of this price risk by choice when they store grain after harvest. This study estimates the realized returns from these post-harvest grain storage and marketing activities and shows that they are small on a risk-adjusted basis, particularly relative to the downside risk of negative returns. One explanation is that farm managers’ use of post-harvest forward contracting is limited so they are subject to considerable flat price risk.
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By Jenn D. Krultz, Gregg Hadley, Robin Reid, Dan O’Brien, and Rich Llewelyn
How can a retiring farmer and returning heir set up an agreement to ensure that the heir’s unpaid efforts will be compensated when the family farm transitions? In this study, three simulation farms were created using the Top Third Profit Category of Kansas Farm Management Association data. Then, three sweat equity arrangements were established and analyzed: a percentage agreement, a salary agreement, and an hourly agreement. Results found all three scenarios to be successful for each farm, with the percentage agreement being the most successful, the annual salary agreement being the next successful, and the hourly agreement being the least successful while still being a profitable option.
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By Margaret Lippsmeyer, Michael Langemeier, James Mintert, and Nathan Thompson
Producer sentiment is typically analyzed on an aggregate basis and believed to be largely driven by market conditions. Our research introduces alternative determinants of producer sentiment. Drawing from survey data gathered in April 2023, we analyze the interplay between producer sentiment, current market dynamics, future anticipations, and underlying farm-specific attributes. Specifically, correlation coefficients and t-tests are used to pinpoint characteristics that inherently differ across three sentiment-defined groups. Our findings indicate that producer sentiment intertwines with expected financial performance, farm resilience, growth prospects, and educational achievements, rather than being solely reliant on current market conditions.
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By Gloria Lenfestey, Michael Langemeier, James Mintert, and Nathan Thompson
This paper examined optimal grain marketing strategies for a southeast Indiana case farm. Specifically, a downside risk model was used to examine the tradeoffs between net return and downside risk, and to determine whether the optimal marketing strategy changed as downside risk was reduced. The hedge and roll marketing strategy had the highest net return for both corn and soybeans. Even when downside risk was reduced, the hedge and roll strategy was an important component of optimal marketing strategies. Results stress the importance of using a portfolio of marketing strategies for corn and soybeans.
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By Jacob Asay, John Ritten, Brian Lee, and Jay Norton
Cover crops are becoming more widely accepted as a viable management practice because of their ability to provide important environmental and soil health benefits. However, adoption of cover crops remains low in certain areas, and the high cost of cover crop integration into irrigated crop rotations appears prohibitive. This paper evaluates cover crop options and management practices to determine if different cover crop scenarios can provide additional income to producers.
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By Alejandro Plastina, Wendong Zhang, and Wendiam Sawadgo
We compared 54 appraisal reports, completed by nine Certified General Appraisers (CGAs) for three Iowa farms at two points in time (2019 and 2020), to evaluate the variability of appraised values and its causes. Our findings confirm that, despite the norms and regulations that CGAs abide by, the appraisal process is subjective in nature, and appraised values can differ by as much as 20% of their average appraised values. Furthermore, observed discrepancies in basic facts considered by CGAs to form their expert opinions on the value of a farm, such as tillable acres and productivity indexes, are non-trivial.
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By Ryan D. Rhoades, Daniel F. Mooney, Matthew McQuagge, Franklyn Garry, and Jason Ahola
Benchmarking is a valuable tool for tracking and comparing the performance of ranch operations over time and relative to peers. However, no benchmark averages have historically been available to cow-calf operators dependent on extensive grazing lands in Colorado. Total Ranch Analysis Colorado (T.R.A.C.) was developed as a collaborative partnership involving Colorado State University faculty and Extension personnel, cattlemen associations, and beef producers. Personnel make onsite visits to collect production and financial records, and participants receive an in-depth analysis that includes a suite of production, financial, and integrated metrics. This article reports benchmark averages from the first cohort of 30 ranch visits.
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By Gabriel S. Sampson, Jonathan Aguilar, Carolyn Baldwin, Jeffrey Davidson, and Heidi Mehl
Water is a critical input to agricultural production in arid regions. Understanding irrigator perspectives and determining their information and technical needs are critical to increasing water conservation while maintaining profitable yields. This paper summarizes survey data for 140 irrigators operating in the High Plains Aquifer portion of southcentral Kansas. We document adoption of different farm management practices, key challenges facing irrigators, information gaps, and qualitative information obtained from open-ended questions. Survey response patterns are discussed in the context of local water use conflicts and water governance.
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By Hannah E. Shear, Roshan Saha, Mykel R. Taylor, and Maria A. Boerngen
Professional farm managers use both work experience and higher education to develop skills necessary for the changing needs of modern agriculture. We asked professional farm managers their perspectives on the essential topics, skills, and competencies that should form the core of farm management education. Results suggest that, in addition to financial analysis and general economics, farm management education needs to focus on “soft skills” such as communication with clients and landowners, negotiations, and relationship management.
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By Anastasia W. Thayer, Justin R. Benavidez, and David P. Anderson
In this paper, we present price and transaction information of fed cattle marketings to explore if differences exist in the quality grade of cattle marketed under different transaction types. In particular, we explore regional differences in marketings for cash, formula, forward, grid, and negotiated grid transactions from 2012 to 2022. Analysis shows that despite an industry trend toward higher-quality grade animals, most low-quality grade cattle are marketed in Texas, Oklahoma, or New Mexico using non-negotiated pricing methods.
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By Raymond J. Thomas, Matthew Myers, Dustin L. Pendell, Mykel Taylor, Jisang Yu, and Amanda Tian
Previous studies have attempted to explain variations in farmland values, but few consider the effect of confined animal feeding facilities (CAFOs) on the value of agricultural land within a certain proximity. Using parcel-level transaction data and fixed-effect models with different specifications on the distance to CAFOs, this study finds a positive relationship between agricultural land prices and CAFOs located within various distances of the parcel sale. With a distance-band specification, the positive effect of CAFOs is more prominent for the 0- to 25-kilometer distance. We also find that the price rises as the nearest CAFO is located closer.
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By Fangyao Wang, Wendong Zhang, and Mykel Taylor
Foreign ownership of U.S. farmland has recently attracted growing interest from the public as well as federal and state policymakers. Using all reported AFIDA transactions, this article provides a comprehensive analysis of the structure of foreign land ownership in the United States. We find that (1) long-term leasing is the main driver of the increasing foreign interests in U.S. farmland over the past 20 years; (2) a considerable number of foreign transactions are related to wind and solar energy development, especially for entities holding long-term leases; and (3) 'adversary' countries like China hold only 1% of all the foreign-owned agricultural land.