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The Wealth Effect in U.S. Agriculture

January 8, 2013

Since 2009, wealth in the U.S. farm sector has surged along with booming farmland values. Similar to nonfarm households, farm enterprises historically have used wealth to support consumption and investments when income fades. During years of low income, farmers tap their existing wealth to finance spending on capital investments such as buildings, vehicles, machinery and other equipment.

Is the Current Farm Prosperity Sustainable? What to Watch

January 1, 2013

Many are asking whether the current prosperity in farming is sustainable. The answer is not obvious, but the following “what to watch” list might provide a useful perspective to answer this question.

Drought, Livestock, and Income Taxes

December 12, 2012

Many Midwestern livestock producers have been adversely affected by weather conditions in 2012. Because of reduced feed supplies, some livestock producers have reduced their herd size through larger than normal sales of livestock in 2012.

2013 Crop Cost and Return Guide

November 1, 2012

The Purdue Crop Cost and Return Guide offers farmers a resource to project financials for the coming cropping year. These are the November 2012 crop budget estimations for 2013.

When Do Farm Booms Become Bubbles?

July 17, 2012

Federal Reserve Bank of Kansas City Symposium, July 16-17, 2012 – Session 1: When Do Farm Booms Become Bubbles? | Rapid increases in agricultural incomes and asset values have brought back memories of previous booms and busts. Henderson, Gloy, and Boehlje (2011) chronicled previous agricultural booms and busts noting that they have often corresponded to rapid expansions and contractions of agricultural exports.

Is This Farm Boom Different?

July 16, 2012

Federal Reserve Bank of Kansas City Symposium, July 16-17, 2012 – Conference Rapporteur: Is This Farm Boom Different? | This has been a very stimulating and informative symposium. First,I will summarize the key “take-aways” of the presentations from my perspective. Then I will make some additional observations and identify some key uncertainties that are shaping the future of agriculture–“what to watch” in these turbulent times.

Farmland Values – Will the Boom Turn Bust?

June 20, 2012

Rapid increases in agricultural incomes and asset values have brought back memories of previous booms and busts. Henderson, Gloy, and Boehlje (2011) chronicled previous agricultural booms and busts noting that they have often corresponded to rapid expansions and contractions of agricultural exports. As in previous eras, today’s agricultural boom has been fueled by increases in export demand. A key difference however, is the dramatic increase in domestic demand associated with the use of biofuels.

Investment and Financing Behavior of Farmers: Responding to Boom and Bust Times

May 10, 2012

Although the U.S. farming sector has exhibited very strong financial performance during the past 5-7 years in terms of income generation, cash flow and debt servicing capacity, and equity accumulation, that strong performance has been accompanied by increased risk.

Farmland Values: Perspectives from the Field

March 6, 2012

After the weather, farmland values might well be the second most popular topic of conversation among farmers. Those with more than 30 years of experience in farming likely remember the 1980s with clarity.