Cash Rents Reflect Lower Farm Incomes
Marcia Zarley Taylor reported on Friday at DTN that, “Some sky-high cash rents are coming back to earth. For the first time this century, Corn Belt cash rents are beginning to recede, particularly in areas where 2014 sub-par yields pounded local farm incomes last fall.”
The DTN article noted that, “If history is any guide, cash rents don’t decline very much or very often. Since 1981, Corn Belt states tracked by the Chicago Federal Reserve only experienced three years when cash rents dipped more than 10% annually — all of them in the midst of the Farm Credit Crisis. Average rents in Iowa, Illinois, Indiana and Wisconsin slid 10% in 1985, another 15% in 1986 and 13% in 1987, according to the Fed. The last time the district’s average cash rents backtracked at all was a 1% drop in 1999. Since 2006, however, average Illinois cash rent costs have more than doubled to nearly $300 per acre.”
Farm Subsidy Benefits for Landlords, Far Less Than Expected
In other policy news, Barrett Kirwan indicated in an update on Friday at the Policy Matters Blog (“Who Benefits from Agricultural Subsidies?“) that, “Based on field-level estimates, it appears that landlords do receive some of the subsidy benefits through higher rental rates, but they receive far less than economists would have expected. We find that using farm-level data from the most widely used farm-level data set, ARMS, overestimates the incidence considerably. Using a new, field-level data set that, for the first time, precisely links subsidies to land parcels, we show that farm-level data lead to considerably biased estimates: Where farm-level estimates suggest an incidence of 39-84 cents of the marginal subsidy dollar, field-level estimates from the same farms indicate that landlords capture just 14-25 cents.”
Be Careful What you Ask For – Catfish Farmers
Ron Nixon reported in Saturday’s New York Times that, “In 2008, faced with increased competition from Vietnam and China, catfish producers in the United States did the unthinkable: They asked for more regulation of their industry.
“Congress concurred and agreed to move the inspection of foreign and domestically produced catfish from the Food and Drug Administration to a more rigorous program at the Agriculture Department. The process, however, has dragged on for nearly seven years.”
Mr. Nixon added that, “Now, as the Obama administration prepares to finalize the inspection regulations, domestic catfish farmers may have received more than they bargained for, experts say.
“More rigorous inspections could cost an already beleaguered industry millions of dollars to comply, potentially driving more catfish farmers out of the business and costing hundreds of jobs in the rural South, said John Sackton, a seafood industry analyst.”