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Jeff_a_Caldwell
Posts: 994
Registered: ‎04-29-2010
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Farm incomes slipping?

Here's another quick report on something that seems to be building into a trend: Economists and analysts saying they think, based on some signs they're seeing, that farm incomes are starting to slip and will be turning lower more in the next few months. Here's a bit from a Fed economist

 

"Bankers expected farm income to weaken over the next quarter. Wheat prices fell in the first quarter, which could keep farm income in the District subdued through this year’s spring harvest. Futures markets also suggest that corn and soybean prices may drop if normal weather patterns return, boosting U.S. crop supplies," he says. "Lower crop prices, however, could eventually lead to improved profit margins in the livestock and ethanol sectors. Still, despite the potential for falling prices, crop insurance prices for corn and soybeans were set at levels that should ensure strong income for many crop producers in 2013."

 

 So, what do you think? Seems like this school of thought's gaining some traction. Does this hit home? If so, what are you doing to head it off? 
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Esteemed Advisor
sw363535
Posts: 4,677
Registered: ‎07-18-2011
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Re: Farm incomes slipping?

Is someone in washington worried about the crop??   Appears so.

sw
Senior Contributor
ray h.
Posts: 437
Registered: ‎05-14-2010
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Re: Farm incomes slipping?

    It seems like uncle just wants to breed fear into the ag sector.Other arcticles out of the ag sector relate a much more dire need for food production.As I have mentioned in previous post weather concerns are immenant.Carry is at appalling levels for true food security,and the weather we are facing this year is going to prove maybe not disastrous but not going to be a bin buster.(combines will prove the final point.) I am not going to elaborate which,but some specialty commods are going to be very short!

Veteran Advisor
Palouser
Posts: 2,250
Registered: ‎05-13-2010
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Re: Farm incomes slipping?

There are definitely some wheat situations I'm watching. If they could tell me what was going to happen to those crops by harvest I could tell whether or not they are right about income.

 

For instance - is drought going to continue in Australia and southern Russia? Is Canada going to have timely planting in the western plains? And so on.

Senior Contributor
buckfarmer
Posts: 1,230
Registered: ‎06-14-2010
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Re: Farm incomes slipping?

The report says decline in the next few months. Compared to what? Well yea, if you listen the guys on here the bins are all empty. nothing left to sell, income will decline. At least till fall. Were they just talking about prices falling?
Senior Contributor
farmer46
Posts: 220
Registered: ‎09-27-2011
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Re: Farm incomes slipping?

Which farmers income will decline?  Grain farmers or livestock farmers or investment farmers? My guess Grain farmers and investment farmers.  First a more important question, Are we at a new normal in grain prices? I believe we are at a new normal, somewhere around 1.5X pre 2005-6. 

 

One other thing, some bankers are the worse at predicting future prices.  For some reason these bankers only see falling prices. Even when land was $1600. my banker thought the sky was going to fall.

Senior Contributor
ray h.
Posts: 437
Registered: ‎05-14-2010
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Re: Farm incomes slipping?

    Bankers,and the trade.(They are just people,) no smarter or nessesarily dumber than any one else,just always looking out for their best interest! More often than not with out much thought for the producers best intrest.