Over the past two or three months, watching the agricultural economy is akin to seeing a slow motion train wreck. In February, USDA economists predicted that crop receipts would drop almost $17 billion in 2024, as a result of decreases in corn and soybean prices, while government farm program payments would decrease by almost $2 billion. The June Ag Economists’ Monthly Monitor, a joint survey between the University of Missouri and Farm Journal that tracks the volatility impacting U.S. agriculture today and what is on the horizon, found that almost 70 agricultural economists are growing increasingly negative concerning the financial health of the crops sector. Economists cite reduced farm exports and current crop prices that are eroding the outlook for the this sector. Although economists views on the ag economy was a bit negative in June, their projection for net farm income in 2024 increased by almost three billion dollars, which is up from the $110 billion projected by economists in May. But an indicator of a cooling agricultural economy is that tractor sales are down this year in all classes of tractors for both new and used equipment. Examples of new tractor sales that have declined include 2WD sub-40-hp tractors that are down almost 19% from 2023, 2WD 40- to 100-hp tractors are 10% lower, and sales for 2WD 100-plus-hp tractors were down about 14%. When asked what they view as the most negative aspect of the outlook for the ag economy, economists point to the possibility that crop prices may retreat more rapidly than input costs, due to commodity prices that will be below economic break-even production costs, as a result of lower exports, specifically due to the lack of Chinese demand., U.S. trade policies, regardless of party affiliations in Congress, constant demand and policy challenges within Congress, which adds barriers to existing and new streams of sales for U.S. farm exports. However, agricultural economists see the livestock sector in a different light for several reasons. On the plus there is a strong demand for beef by consumers. Second, while lower grain prices will negatively affect crop producers, livestock producers will see cheaper cost of gains for livestock. Also, cow-calf operators in areas of the country with good forage conditions will have the ability to put weight on calves before they’re shipped to feeder markets. Also, diverse world weather should boost U.S. agricultural exports, while the possibility of good yields will help farmers hit their financial goals if discipline by producers keeps acreage expansion in check, which will result in U.S. grain prices being more competitive in the global market. All of this is contingent on farmers being eager to make adaptations necessary to be profitable and to stay in business
Enough about the economy. Farm Progress Magazine recently published a survey concerning the demand for students whose various agricultural majors had the best graduation and job placement rates at the University of Minnesota, South Dakota State University, North Dakota State University, the University of Missouri and the University of Nebraska-Lincoln. The survey found that students with degrees in animal science or veterinary science, ag business and economics, crop sciences, general agriculture, and biochemistry were all highly sought after by the agricultural industry. The survey also found that the reason that graduates of these agricultural majors are in high demand is because the course work is applied to the real world of agriculture and is a hands-on learning environment.
Winston Churchill wrote, “Attitude is the “little thing” that makes a big difference.”
