Economics Commons^™

Surviving Variable Yields And Prices, Kara Zimmerman, Cory Walters, Jessica Groskopf, Matt Stockton, Kate Brooks

Cornhusker Economics

A marketing strategy focusing on prices from the most re-cent past, indirectly gives little or no weight to all of the other possible price outcomes. While it is intuitive that the most recent prices are more likely to play a role in our decision-making process, there are other price events that can happen. The seasonal price path from the 2019/2020 crop year was nothing like we have recently experienced. Sup-pose we entered the 2020’s marketing decision using a seasonal approach that considers only the average price series over the past 5 years (2015-19 average), Figure 1. The seasonal average indicates …

Livestock Indemnity Program: A Case For Managing Risk With Good Recordkeeping, Jay Parsons

Cornhusker Economics

Keeping good records is an important risk management tool for agricultural producers. Good records provide accurate, complete and consistent information that leads to better decision making. Good records also keep the farm or ranch operation in a good position to participate in USDA programs when those opportunities are available.

The Livestock Indemnity Program (LIP), one of the USDA disaster assistance programs administered by the Farm Service Agency (FSA), is an example of how good recordkeeping can be rewarded. LIP provides compensation to eligible livestock producers who have suffered livestock death losses in excess of normal mortality due to adverse weather, …

The Economy, The Stock Market, And A Bucket Of Chicken, Tim Meyer

Cornhusker Economics

Economists, unlike MDs and lawyers, are never able to sidestep professional questions. Whether it is at parties, or waiting to pick up kids from school, the “economy” is al-most as common as the weather for small talk. Fortunately, most economists are eager to opine on the current state of affairs, and almost as many are willing to guide laypeople to a truer understanding of what the “economy” actually is. This article will provide a definition of the economy, the Gross Domestic Product (GDP), and their importance. It will conclude by addressing the difference between the overall economy and the performance …

Market Trends In Food Consumption Expenditures Away From Home Prior To The Covid-19 Pandemic, Rebecca Weir

Undergraduate Economic Review

U.S. food consumption expenditures away from home increased from 19 percent of total food expenditures in 1955 to 48 percent in 2015. Simultaneously, female participation in the labor force grew by 52.7 million women from 35 to 57 percent, signifying increased opportunity cost for women to prepare meals at home. This research uses an ordinary least squares regression to examine socioeconomic factors influencing the rise in U.S. food consumption expenditures away from home in 2018. Results inform food production and service industries’ marketing strategies, and set the stage for whether a new pattern emerges in response to the COVID-19 pandemic.

2020 Nebraska Ballot Issues – Election Results, J. David Aiken

Cornhusker Economics

This publication provides educational information regarding the two constitutional amendments recommended by the Unicameral to Nebraska voters and the four citizen ballot initiatives on the November 2020 general election ballot.

Seasonal Forecast Based Preharvest Hedging, Eric D. Hunt, Cory Walters, Toni Klemm, Iyore Eronmwon

Cornhusker Economics

Given the immense effect of weather on agriculture, skillful weather forecasts are of importance to agricultural producers for effective decision making. Weather forecasts affect operational decisions such as whether or not to irrigate (where applicable), when to apply fertilizer, when to spray herbicide and pesticide, and certainly the timing of planting and harvesting. At the seasonal time scale, say in the spring, just before planting, weather forecasts may be used for strategic decision making on outcomes, say from preharvest hedging (hereafter referred to hedging), that will not be realized until the fall or harvest. Historically, the lack of skill in …

Pork In The Future: The New Futures And Options Contracts On Pork Cutout, Fabio Mattos

Cornhusker Economics

The CME Group has announced its plan to launch futures and options contracts on pork cut-out. The new contracts are scheduled to start trading on November 9, 2020. The exchange has al-ready been offering futures and options contracts on lean hogs and now adds another contract that the industry can use for risk management. While the existing futures contract on lean hogs is based on prices paid for hogs in the U.S., the new con-tract on pork cutout is based on prices paid for wholesale cuts of pork.

The Economic Impacts Of Social Activism In Food Markets, Anubrata Deka, Emie Yiannaka, Konstantinos Giannakas

Cornhusker Economics

Private politics, usually led by nongovernmental organizations (NGOs) and social activists, focuses on changing the behavior of private economic agents through social pressure rather than through government action (although government action is also possible) (Baron, 2003). The food sector has been experiencing increased social pressure from social activist organizations to achieve diverse goals, ranging from improving food safety and food fortification to increasing transparency in food markets. A primary reason for the increase in organized activism in the food sector is the proliferation of the provision of credence attributes which are attributes unobservable through search or experience (consumption and use). …

Corruption And Cooperative Organizations, Konstantinos Giannakas, Murray E. Fulton

Cornhusker Economics

Although the literature is limited, there is evi-dence that corruption in cooperatives and inves-tor-owned firms (IOF) is widespread in develop-ing and transition economies where corruption generally is common. Cooperative corruption is also found closer to home. Two recent examples from the United States include the Ashby Farm-ers’ Cooperative Elevator in Minnesota where the general manager stole from the cooperative and the Tri-County Electric Cooperative in South Carolina where board members enriched them-selves with perks and benefits. In Canada, the PACE Credit Union was placed under the regula-tor’s control in 2018 after two senior executives were discovered to have received secret …

Distillers Grains Pre, During, And Post Covid-19: Ongoing Recovery And Structural Demand Implications, Daniel Gertner, Elliott James Dennis

Cornhusker Economics

Prior to the shutdowns caused by the COVID-19 pandemic, distillers grains and other co-products of ethanol production played a crucial role in maintaining the rev-enue stream of dry mill ethanol plants (Irwin 2020). With low crude oil prices over the last half of the decade and corn prices holding steady over the same period of time, the margin for error in the ethanol industry was thin. More than a third of Nebraska’s ethanol plants either temporarily or permanently closed in 2019 (MacroTrends 2020); (York News Times 2019). To prevent similar outcomes, ethanol plants focused on diver-sifying their operations to produce …

Primary Reasons For Not Attending Farmers' Market. Do Market Features And Consumer Characteristics Matter?, Autumn Milliner

Masters Theses & Specialist Projects

The number of farmers’ markets has been growing, but consumer attendance does not appear to rise at the same rate. The overall purpose of this study was to investigate primary reasons for not attending. Specific objectives were: (1) describe the consumer characteristics of individuals who do not attend farmers’ markets (2) investigate the consumer characteristics and market amenities that influence a consumer’s choice to not attend a farmers market (3) estimate the variables that impact a consumer’s level of interest in subscribing to a CSA and (4) assess and estimate the relationship between consumer characteristics and their willingness to pay …

Crop Yield Growth Along The 41st Parallel: Contributions Of Environmental Vs. Human-Controlled Factors, Federico Trindade, Lilyan E. Fulginiti, Richard K. Perrin

Cornhusker Economics

Increasing crop yields in an area we recently studied has helped keep farmers competitive and helped to keep the world’s growing population fed. But how much of that yield increase has been due to more favorable climate versus human-controlled factors such as higher input use, irrigation, better genetics, etc.?

Community Development In The Time Of Covid-19, Daniela Mattos

Cornhusker Economics

The global pandemic has driven the whole country into an unprecedented crisis. As the months passed and the death toll climbed, the pandemic did some-thing else: it unveiled deep inequities within the country. Those getting sick and dying were disproportionately low-income racial and ethnographic minorities, most of them essential workers. According to the lat-est data from the Center for Disease Control and Prevention, the virus has overly affected Black people and Latinos (https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/index.html). Communities of color are also over represented among essential workers who are generally unable to work from home and more likely to come into contact with the …

Assumptions (Mistakes) That Parents Make With Estate Plans, Allan Vyhnalek

Cornhusker Economics

The main goal of many parents when writing their estate plan is for their children to continue to be a family. With this goal in mind, parents make many assumptions to “keep the peace” when planning their estate. If the family has a key fight then family activities, like holiday gatherings, no longer happen. Let’s look at these assumptions and make some observations about each. The overall goal is to think through our actions with the intent that the family stays together.

Without an estate plan, the assets are divided ac-cording to the laws of the state of Nebraska. That …

The Impact Of Covid-19 On Nebraska’S Nonprofits, John C. Beghin

Cornhusker Economics

This article describes the impact of COVID-19 on nonprofit organizations in Nebraska based on evidence gathered in two business surveys coordinated by a research consortium. The consortium is made of the State of Nebraska, the Nebraska Chamber of Commerce, the University of Nebraska (UNO, UNL) and several local project partners. Additional information was provided by the Nonprofits Association of the Midlands (NAM), through two surveys of its member-ship and interviews with core staff at NAM, to corroborate the survey results. The business surveys took place in April and June 2020 gathering response of 646 (April) and 137 (June) nonprofit entities. …

Multi-Peril Crop Insurance Basics, Matt Stockton, Duran Rudnick, Chuck Burr

Cornhusker Economics

The Federal crop insurance corporation (FCIC) https://www.rma.usda.gov/Federal-Crop-Insurance-Corporation and https://www.everycrsreport.com/reports/R45193.html offers three types and eight levels of taxpayer subsidized multi-peril crop insurance (MPCI) policies, sold for four different unit types. The unit types are designed to define the nature of the farm area being insured. There are four types of insurable units, optional, basic, enterprise and whole farm. Each of these units has differences in costs per acre and is likely to create variations in indemnities. For example, a highly localized severe hail storm on a single field covered using basic units would likely have an indemnity, versus not likely to …

2020 Nebraska Property Tax Changes, J. David Aiken

Cornhusker Economics

The Nebraska Unicameral enacted significant property tax relief legislation in the closing days of the 2020 legislative session. The last-minute compromise was negotiated by seven legislators selected by the Speaker. The compromise estab-lishes a refundable state income tax credit of an estimated 6% of the property taxes paid for local schools (excluding property taxes for school bonds and school budget overrides). Taxpayers will be able to claim this credit on next year’s Ne-braska state income tax return. For fiscal years (FYs) 2021-22 through 2023-24 (i.e. from July 1, 2021, through June 30, 2024), the amount availa-ble for the refundable state …

Annie’S Project: Know Your Numbers, Know Your Options, Jessica Groskopf

Cornhusker Economics

To help farmers and ranchers improve their record keeping and decision making, Nebraska Extension has hosted several Know Your Numbers, Know Your Options courses across the state since October 2019. These programs are inspired by Annie’s Project.

Annie's Projects are educational courses for wom-en that focus on agricultural risk management topics. These hands-on programs aim to increase the knowledge, skills, and abilities of attendees. They encourage attendees to ask questions, connect with participants and speakers, and share their experiences.

Risk Management Needs And Challenges For Agriculture, Bradley D. Lubben

Cornhusker Economics

Farmers and ranchers must continually manage risk in their operations to be successful. But the amount of risks and challenges they have faced over the past few months and years seems almost unprecedented. From financial challenges toproduction and market shocks to public health scares and policy developments, agriculture has had to respond and adapt to a wide range of issues.

Cares Act Implications On Tax Planning For Farmers, Tina Barrett

Cornhusker Economics

The CARES Act, passed in March of 2020, provid-ed many changes that directly impacted farmers. It created both the Payroll Protection Program (PPP) and Economic Injury Disaster Loans (EIDL), which many farmers utilized. However, the CARES Act included several other provisions that didn’t get as much attention. Farmers need to be aware of these as they go into tax planning this fall, as they could benefit their operations.

Estimating A Fair Value For Standing Forage, Jay Parsons, Daren Redfearn, Mary Drewnoski

Cornhusker Economics

Several things need to be considered when deciding what value to place on standing forage. Forage prices reflect current inventories, demand, expected current season production and associated yield risk, and quality characteristics. Standing forage can be harvested in a number of different ways which need to be considered when pricing it. Below, we provide a few general thoughts and questions concerning harvesting method and comparable feed value to consider when pricing standing forage. We follow with a few examples illustrating pricing calculations for forage mechanically harvested as hay, haylage, and silage. We close with pricing considerations for forage harvested by …

Feeder Cattle Future Price Spreads: Opportunities To Hedge?, Elliott James Dennis

Extension Farm and Ranch Management News

First paragraph:

Feeder cattle future price spreads across all months have recovered to near pre-COVID-19 levels as quarantine restrictions and packing plant capacity issues have been mostly sorted out. For example, for the week of July 17, 2010 [sic], prices reached levels not seen since the beginning of March 2020. Pasture and corn progress are two factors that have the potential to push prices lower in the next coming months. Given current market conditions, producers have some options to lock in a margin.

Historic Analysis Of Flooding And Excessive Moisture Across Nebraska And Implications For Agricultural Lease Arrangements In 2020, Jim Jansen, Jeffrey Stokes

Cornhusker Economics

The Nebraska Farm Real Estate Market Survey and Report 2019-2020 provides insight on recent trends on the market value of agricultural land and cash rental rates across the state. Each year, the special feature section from this report covers topics on new or emerging issues related to the agricultural land industry in Nebraska. These topics reflect interest expressed by panel members and readership of the Nebraska Farm Real Estate Market Highlights Reports. The special feature section in 2020 evaluates historic flooding and excessive moisture over the prior decade across Nebraska and implications on accounting for this type of risk in …

Coronavirus Food Assistance Program (Cfap) Payments For Nebraska Livestock Producers, E. Wesley F. Peterson

Cornhusker Economics

In the June 10, 2020 issue of Cornhusker Economics, the Coronavirus Food Assistance Program (CFAP) was described and the average level of payments to Nebraska Corn and Soybean Producers from this program were estimated. CFAP includes payments for both livestock and crops and in this issue, I explain eligibility requirements, payment sources, and expected payments for Nebraska livestock producers. The COVID-19 epidemic in the United States caused hardships for both producers and consumers of livestock products. The virus affected workers in livestock processing and packing plants, in particular, due to the nature of the work which normally requires working in …

2020 Nebraska Agricultural Custom Rates With Statewide Survey Summary, Gelnnis Mcclure

Cornhusker Economics

With the large investment cost of agricultural machinery and equipment, and often with the uncertainty of labor availability, many Nebraska farms and ranches utilize and pay for custom services. There is generally great interest in the biennial University of Nebraska-Lincoln Custom Rates Survey report from those that perform services and those that pay for services. The recently completed 2020 Nebraska Custom Rates Survey and accompanying report summarize current rates charged for specific machinery operations and custom services across the state.

The Value Of Soil Sampling And Sampling Density: Conceptual Framework (Part 1), Taro Mieno, David Bullock

Cornhusker Economics

When considering variable-rate nitrogen or seed application, soil sampling can provide farmers and their consultants with valuable information about the spatial distributions of soil properties such as organic matter, micro- and macro-nutrients, and pH. Conceptually, that information may be especially valuable for site-specific input management. But just as farmers make decisions about input applications, they also must make decisions about soil sampling, and in particular, must choose soil sampling density. It is standard practice for U.S. corn and soybean farmers to take soil samples on their fields every three or four years at a density of one sample per 2.5 …

Farm And Ranch Enterprise Budgets: Return To What?, Larry Van Tassell, Jay Parsons, Glennis Mcclure

Cornhusker Economics

Budgets capturing the projected revenues and costs associated with producing and marketing a single commodity are generally called enterprise budgets or cost and return estimates but can also be referred to as profit center budgets. Two of the major purposes for developing enterprise budgets are to determine which enterprises are the most profitable and to determine breakeven prices for use in a marketing plan. Enterprise budgets produced by the University of Nebraska-Lincoln can be found at farm.unl.edu.

Can Commodity Prices Be Negative? Revisiting The Events In The Crude Oil Market In April., Fabio Mattos

Cornhusker Economics

Preventive measures adopted during the COVID-19 pandemic have changed our lives and businesses in many ways. Commodity markets have also witnessed unique events that were partially influenced by those changes. In April, for the first time in history, prices in a large exchange-traded futures market turned negative. Crude oil futures prices for May 2020 delivery were traded below zero on April 20 and 21, reaching a minimum of –$40.32/barrel. If I am selling crude oil to you for –$40.32/barrel, it means that I am giving you the contracted amount of crude oil and paying you $40.32/barrel to take my oil. …

Utilizing Annual Forage Crops In Rotations, John Hewlett, Jay Parsons, Jeff Tranel

Extension Farm and Ranch Management News

First paragraph

Approximately 60 million acres of forage are harvested annually in the United States, according to the National Agricultural Statistical Service (NASS). With lower commodity grain and oilseed prices along with high pasture rental rates and/or difficulty finding range and pasture to rent, some producers are considering ways to incorporate more forages into their crop rotations.

Coronavirus Food Assistance Program (Cfap) Payments, Anil Giri, E. Wesley F. Peterson, Sankalp Sharma

Cornhusker Economics

On April 17, 2020, U.S. Secretary of Agriculture Sonny Perdue announced the Coronavirus Food Assistance Program (CFAP), a new program to assist producers and consumers affected by the COVID-19 pandemic (USDA 2020b). CFAP will provide $19 billion in relief to producers and entities throughout the supply chain. This will be done through two programs, Direct Support to Farmers and Ranchers ($16 billion) and USDA Purchase and Distribution ($3 billion) (USDA 2020a). Producers will be paid on actual losses due to decreases in prices and/or disruption of supply chains. On May 19, 2020 USDA announced the details of the CFAP. There …