USDA’s latest farm income estimate a tale of black swans, record yields, tenant farmers

By Mary Hightower
U of Arkansas System Division of Agriculture

LITTLE ROCK — The U.S. Department of Agriculture’s latest farm income forecast, showing a somewhat rosier picture than it forecast in February, is a tale of record yields, black swans and tenant farmers.

At left, Hunter Biram, at right, Ryan Loy, both extension economists with the U of Arkansas System Division of Agriculture.  The two chime in on the implications of the Sept. 5, 2024, farm income update from USDA. (U of A System Division of Agriculture image)

The report, released last Thursday, showed net farm income was expected to decline 4.4 percent, compared to the 22 percent USDA had forecast earlier in the year. The forecast is the result of a complex intertwining of factors including available stocks of commodities, predicted yields and “black swan” events such as the COVID pandemic and persistent drought.

USDA said net farm income was forecast at $140 billion, down 4.4 percent from the previous year.

Broad strokes

The overall farm income report is influenced by expectations for the sales of livestock and poultry and plant commodities. Cash receipts from commodity sales were expected to decrease by $9.8 billion, from $526.3 billion in 2023 to $516.5 billion in 2024.

“The expectations of animal receipts in February was much lower and that was putting downward pressure on everything else,” said Ryan Loy, extension economist for the University of Arkansas System Division of Agriculture. “But now, the USDA  thinks animal receipts are going to offset low crop receipts.”

USDA put the value of production of livestock at $19 billion and the value of crop production at minus $25.6 billion.

Loy said “On the crop receipt side of things — driven mostly by corn and soybeans, because they have the most acreage overall — corn is going to be down about $16 billion. Soybean is going to be down about $8.6 billion.

“What they’re predicting is just the crop receipts alone is going to be down about 10 percent to about $249 billion,” he said.

Record yields

Corn and soybean stocks from the previous growing year were high, and 2024 looks like another high-yield year. USDA’s National Agricultural Statistics Service was forecasting record corn and soybean yields for the United States, including Arkansas.

Slide from USDA presentation on farm income. ((mage courtesy USDA)

Following supply and demand, those high supplies mean “we don’t have any supply constraints on prices,” Loy said, a situation made worse by the lowering Mississippi River preventing shippers from moving full barges of commodities out to the Gulf of Mexico.

USDA also said the cost of crop production would decline by $4.4 billion, or 1 percent, due to lower costs of inputs such as fertilizer and fuel. Loy said the decline in production costs might have another cause: “They might be a function of leaner operations” that simply aren’t buying as many inputs as they have in previous years.

The forecast said farm sector assets would increase 5.2 percent while debt would increase 4.2 percent.

Farm equity is also a factor in how net farm income is calculated. USDA is forecasting a brighter picture with farm equity increasing 5.3 percent, although it’s unclear whether its equity forecast includes tenants that are non-farm owners — those who rent land to farm.

According to 2017 USDA figures, 6.7 percent of Arkansas farmers are tenants.

“The tenants are the ones who are really going to be impacted this year,” Loy said. “They don’t have as much of their equity in land. Land appreciates over time, whereas tenants typically have equity in depreciable assets, such as machinery.

“In a time where cash on hand is important, having equity in machinery versus land means you may only recover a portion of your debt obligation through sales of machinery,” Loy said.

Shifting from market-based to emergency-based

Government assistance to farmers was another significant shift under the report’s surface, said Hunter Biram, an extension economist with the Division of Agriculture. Biram is also associate director of the Southern Risk Management Education Center. This assistance is also included in the calculations for net farm income.

USDA said direct government payments were forecast to decline $1.8 billion, or 15.1 percent from 2023 to 2024.

There are several types of government assistance to agriculture: programs that provide a safety net from commodity market fluctuations, supplemental assistance in case of natural disaster, resource conservation incentive programs and ad hoc programs.

ARC, or Agriculture Risk Coverage, and PLC, or Price Loss Coverage, are market-based programs that financially protect farmers from substantial drops in crop prices or revenues. Both programs are legacies of the 2014 Farm Bill. Non-market-based assistance available to farmers includes ERP, or Emergency Relief Program, and ad hoc programs such as the Pandemic Assistance Revenue Program, Coronavirus Food Assistance Program and the Pandemic Market Volatility Assistance Program.

“What I find particularly interesting is that shift in proportion of assistance from majority ARC and PLC — market-based assistance — to majority supplemental assistance and ad hoc assistance,” he said.

“From 2015-18, the percentage of government assistance attributed to these market-based programs averaged about 48 percent,” Biram said. “Supplemental programs, that average was about 18 percent and conservation programs was about 31 percent.

“Now, if you look at 2019 through the 2024 report released on Sept. 5, the ARC-PLC percentage is 7 percent, the supplemental proportion is 69 percent, and conservation is 22 percent,” he said.

“The implication I see immediately is that the current market-based programs are potentially outdated,” he said. “They were written for the 2014 Farm Bill with no significant changes in the ’18 Farm Bill.”

Asked if the shift from market-based to ad-hoc was due to higher incidences of natural disasters or other events, Biram said, “it could possibly be from more frequent what people call ‘black swan’ events — these events that have very low probabilities of occurring like the pandemic, like the Russian invasion of Ukraine.

“It could be that supplemental assistance is more feasible to roll out versus changing the existing commodity programs,” he said. “But it doesn’t diminish the fact that the commodity program has not provided adequate risk protection in recent years. I think there is an implication for an improved safety net. And while these are low-probability events, I don’t think they explain the difference in 48 percent versus 7 percent.”

ERP on its own is another factor in the improved forecast for net farm income, Biram said.

“Most of the government assistance for the years 2022-2024 are the Emergency Relief Program and conservation programs,” Biram said. “ERP assistance for the 2020-2021 crop years was delivered in two phases in 2022 and 2023. In 2024, another round of phase one payments are projected to be released due to a rule which limited ERP assistance to producers who received federal crop insurance indemnities.”

To learn about extension programs in Arkansas, contact your local Cooperative Extension Service agent or visit www.uaex.uada.edu. Follow us on Twitter and Instagram at @AR_Extension. To learn more about Division of Agriculture research, visit the Arkansas Agricultural Experiment Station website: https://aaes.uada.edu/. Follow us on Twitter at @ArkAgResearch. To learn more about the Division of Agriculture, visit https://uada.edu/. Follow us on Twitter at @AgInArk.

Biram named associate director of Southern Risk Management Education Center

By Tracy Courage
U of A System Division of Agriculture

LITTLE ROCK — Hunter Biram has been named associate director of the Southern Risk Management Education Center, effective June 15.

LEADAER —Hunter Biram has been named associate director of the Southern Risk Management Education Center. (Division of Agriculture photo)

The new role is in addition to his current duties as assistant professor in the Department of Agricultural Economics and Agribusiness at the University of Arkansas and as extension economist for the University of Arkansas System Division of Agriculture.

The Southern Risk Management Education Center, housed within the Division of Agriculture, is one of four centers nationwide whose mission is to educate farmers and ranchers to manage the unique risks of producing food. The center is funded by the National Institute of Food and Agriculture, which is part of the U.S. Department of Agriculture.

The center has served nearly 1 million individual farmers and ranchers in the southern region, empowering them with the skills and tools to effectively manage risk. The southern region encompasses Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, North Carolina, Oklahoma, Puerto Rico, South Carolina, Tennessee, Texas, Virginia and the U.S. Virgin Islands.

“I am excited to have Dr. Biram join our leadership team,” said Ron Rainey, center director and assistant vice president for the Division of Agriculture. “His appointment allows the center to leverage Hunter’s expertise and experience in policy and crop insurance. SRMEC will be able to enhance the depths of our outreach programs.”

Biram brings plenty of experience to the job. He grew up in Floral, Arkansas, working on a diverse family farm operation consisting of a cow-calf herd, broiler chickens, a greenhouse nursery and peach orchard. His applied research and extension program focuses on agricultural production and price risk management using federal crop insurance and commodity programs in the farm bill.

"As associate center director, I plan to raise the profile of and elevate the need for extension risk management education across the Southeast region,” Biram said. “It has become quite clear the need exists for risk management education for producers managing risk with federal crop insurance, especially those who are historically underserved. Additionally, I plan to improve measuring extension scholarship for my colleagues across the region so we can better tell our story as extension specialists to the institutions we serve our states with."

Biram has a Bachelor of Science in Agribusiness from Arkansas State University; a Master of Science in Agricultural Economics from Mississippi State University; and a Ph.D. in Agricultural Economics from Kansas State University.

Biram will work with Rainey and Erica Fields, an associate center director responsible for overseeing the center’s financial operations.

For more information about the Southern Risk Management Education Center, visit http://www.srmec.uada.edu

To learn about Extension programs, contact your local Cooperative Extension Service agent or visit www.uaex.uada.edu. Follow us on X and Instagram at @AR_Extension. To learn more about Division of Agriculture research, visit the Arkansas Agricultural Experiment Station website: https://aaes.uada.edu. Follow on X at @ArkAgResearch. To learn more about the Division of Agriculture, visit https://uada.edu/. Follow us on X at @AgInArk.

Two Farm Bill proposals boost reference prices

By Mary Hightower
U of A System Division of Agriculture

LITTLE ROCK — Despite their differences, the Farm Bill proposals led by U.S. Rep. Glenn "GT" Thompson and U.S. Sen. Debbie Stabenow both contain some first-in-a-decade updates to critical farm safety net programs.

Thompson, of Pennsylvania, is chair of the House Committee on Agriculture, and Stabenow, of Michigan, chairs the Senate Agriculture, Nutrition, and Forestry Committee. Each has led separate efforts to write the 2024 Farm Bill. On Thursday, the House ag committee was marking up Thompson’s version, the Farm, Food and National Security Act of 2024. Stabenow released the Rural Prosperity and Food Security Act on May 1.  

FARM BILL — Extension economist Hunter Biram offers insights on the new Farm Bill proposals in the House and Senate. (U of A System Division of Agriculture photo)

The Farm Bill is important to farmers for the safety nets it provides in an industry subject to the whims of weather, war and trade. The Farm Bill is also important to funding the Supplemental Nutrition Assistance Program, or SNAP, which provides a food safety net for low-income families.

The United States is currently working from the 2018 Farm Bill, which has been extended through Sept. 30.

In hearings over the last two years, farmers have sought a number of changes including higher reference prices and stronger safety nets for specialty crop farmers.

Reference prices determine when farm subsidies are triggered under programs such as Price Loss Coverage, or PLC. If a market price for a covered commodity falls below that reference price, farmers receive PLC payments.

Hunter Biram, extension economist for the University of Arkansas System Division of Agriculture, said on Thursday that the current reference prices were set in 2014. Much has happened in the decade since then: COVID, supply chain issues, Ukraine and the Middle East, not to mention disastrous weather.

Biram also said purchasing power has eroded since 2014 and the cost of crop production including inputs such as fuel, fertilizer and management tools, have increased over the decade.

“When the 2014 Farm Bill was written in 2013, we saw the index for input prices paid were around the same as the index for prices farmers received,” he said. “Since 2013, we have seen a divergence in the input price paid index being greater than the price received index, with the widest gaps being from 2014 to 2020.”

While higher reference prices are common to both proposals, “I would say the Thompson-led version is more aggressive on the farm safety net,” Biram said. “The Stabenow-led proposal is more aggressive on changes for risk protection for specialty crop producers.” The Thompson proposal includes a 10-20% in statutory reference prices while the Stabenow proposal allows for at least a 5% increase in statutory reference prices.

The Thompson proposal would increase Agriculture Risk Coverage, or ARC, coverage from 86 percent to 90 percent. The Stabenow proposal would increase ARC coverage from 86 percent to 88 percent.

Both ARC and PLC were first authorized under the 2014 Farm Bill.

Biram also said both versions the House and Senate both increase affordability and enhance risk protection for products with county-level triggers, such as Supplemental Coverage Option, or SCO. SCO provides additional coverage for a portion of a producer’s underlying crop insurance policy deductible. Producers must buy it as an endorsement to either the Yield Protection, Revenue Protection, or Revenue Protection with the Harvest Price Exclusion policies.

“The premium subsidy rate across all the coverage levels for the Supplemental Coverage Option have increased from 65 percent to 80 percent so farmers will pay 15 percent less of the actuarially fair premium under both proposals,” he said.

For specialty crop farmers — those who grow fruits, nuts and nursery crops including flowers — the Stabenow-led bill streamlines the application process and enhances coverage quality in Whole-Farm Revenue Protection, Noninsured Crop Disaster Assistance Program and the Micro Farm Program, Biram said.

Will there be a Farm Bill in 2024?

“It’s an election year. There are 34 Senate seats and every seat in the House is up for election and you may have heard, there’s a presidential election too,” Biram said. “Once the election has finished, we’ll see more progress. I’m more optimistic that we will see a Farm Bill in 2025 than I was before, but 2024 is, I think, very unrealistic.”

See related stories:

• Congress urged to strengthen price, revenue supports, crop insurance programs at Farm Bill listening session

• Farm Bill witnesses urge protection improvements amid high input costs

To learn about extension programs in Arkansas, contact your local Cooperative Extension Service agent or visit www.uaex.uada.edu. Follow us on X and Instagram at @AR_Extension. To learn more about Division of Agriculture research, visit the Arkansas Agricultural Experiment Station website: https://aaes.uada.edu. Follow on X at @ArkAgResearch. To learn more about the Division of Agriculture, visit https://uada.edu/. Follow us on X at @AgInArk.

Arkansas net farm income decline projected to continue in 2024

LITTLE ROCK — Arkansas’ 2024 net farm income is expected to fall $0.5 billion from 2023 levels, according to a report Tuesday from the Rural & Farm Finance Policy Analysis Center.

WIN SOME, LOSE SOME — Arkansas’ 2024 net farm income is expected to fall $0.5 billion from 2023 levels, according to a report Tuesday from the Rural & Farm Finance Policy Analysis Center. (Chart courtesy University of Missouri.)

The “Spring 2024 Arkansas Farm Income Report” has two Arkansas authors, Hunter Biram and Ryan Loy, both extension economists for the University of Arkansas System Division of Agriculture. Additional authors are John Kruse, of World Agricultural Economic and Environmental Services, LLC; and TaylorAnn Washburn of the University of Missouri.

The report said that the state’s projected 15 percent drop in net farm income is smaller than the forecasted 25.5 percent decrease in U.S. net farm income for 2024.

“After record-setting farm income in 2022, Arkansas saw a backpedal in 2023 that is projected to extend into 2024 with another $0.5 billion decline in net farm income,” the report said.

“The No. 1 thing driving the drop of income is lower prices for crops across the board,” Biram said, thanks to abundant harvests of soybeans and corn in Brazil and United States in 2023.

“We have a lot of stocks on hand across most commodities right now which is driving a lot of that drop in crop receipts," he said.

The report said crop receipts are estimated to decline by $0.5 billion as many crop and livestock prices are projected to move lower in 2024.

Biram said the model used in this analysis “is expecting one or two cuts in the interest rate this year, resulting in lower interest expense. Fuel and fertilizer expenses are expected to fall too.”

However, “lower crop expenses and lower crop prices kind of cancel each other out.”

Pumped by emergency payments

Extension economist Hunter Biram was among the authors of the April 2, 2024, farm income report. (U of A System Division of Agriculture photo by Mary Hightower)

“What made 2022 farm income relatively high was all the government payments from emergency relief programs,” Biram said. 

PLC, or Price Loss Coverage, is trigged when marketing year average price of a covered commodity is less than the respective effective reference price.

Biram said that while the data for the analysis is projecting long grain rice to fall below the $14 reference price, “one strong caveat is that this model is stochastic which means is that there are many difference prices that are projected and an average is taken across those prices.

"While there is a low chance of the long grain reference prices falling below $14 per hundredweight, there’s a much higher chance that the average price will be above the reference price and not trigger PLC payments," he said.

Biram is also expecting there to be little chance for ARC –- Agriculture risk program –- payments. 

On the plus side, the report said that “production expenses are projected to offer some relief with a nearly $0.6 billion decline as feed and fertilizer move lower. Although net farm income has declined from record levels, estimated 2024 levels are still higher compared to 2021.”

Livestock sector

Livestock receipts are expected to decline $0.4 billion in 2024 on lower prices for broilers, turkeys and eggs.

Cattle and calves receipts are expected to decline only slightly in 2024, as higher prices help offset lower supplies. Continued projected higher prices in 2025 and 2026 will drive cash receipts higher.

Partnership

The Rural and Farm Finance Policy Analysis Center at the University of Missouri was launched in March 2022. RaFF is closely aligned with the Food and Agricultural Policy Research Institute at the University of Missouri. The center works in partnership with other states to provide objective policy analysis and inform decision-makers on issues affecting farm and rural finances. The center produces farm income projections for states and regions that are consistent with each other. Cooperation with participating states brings local expertise to enhance model design and estimates.

To learn about extension programs in Arkansas, contact your local Cooperative Extension Service agent or visit www.uaex.uada.edu. Follow us on X and Instagram at @AR_Extension. To learn more about Division of Agriculture research, visit the Arkansas Agricultural Experiment Station website: https://aaes.uada.edu. Follow on X at @ArkAgResearch. To learn more about the Division of Agriculture, visit https://uada.edu/. Follow us on X at @AgInArk.

Arkansas planned acreage falls slightly overall; corn and wheat see deepest cuts

By Ryan McGeeney
U of A System Division of Agriculture

LITTLE ROCK — While overall intended crop acreage fell just 2.5 percent in Arkansas in 2024 to about 7 million acres, some crops saw significant shifts in acreage, according to a U.S. Department of Agriculture report released Thursday.

SHIFTING ACRES — The 2024 Prospective Plantings Report, compiled by USDA’s National Agricultural Statistics Service, found that acreage for most of the country’s principal row crops will likely only shift a few percentage points one way or the other this year. The report is based on self-reported planting intentions from growers across the United States. Nationally, projected crop acreage fell about 2 percent in 2024, to about 313.3 million acres. (Graphic courtesy USDA.)

The 2024 Prospective Plantings Report, compiled by USDA’s National Agricultural Statistics Service, found that acreage for most of the country’s principal row crops will likely only shift a few percentage points one way or the other this year. The report is based on self-reported planting intentions from growers across the United States. Nationally, projected crop acreage fell about 2 percent in 2024, to about 313.3 million acres.

Arkansas corn and wheat acreage take a nosedive

Arkansas intended corn acreage fell sharply, down 27 percent, from 850,000 acres to 620,000 acres. Wheat acreage also fell significantly in the state, down 41 percent from 230,000 acres to 135,000 acres. Nationally, corn acreage fell 5 percent to about 90 million acres, while producers said they planned to plant nearly 47.5 million acres of wheat, about 96 percent of what was planted in 2023.

Jason Kelley, extension wheat and feed grains agronomist for the University of Arkansas System Division of Agriculture, said that the significant drop in corn acreage was no surprise, given that the state was coming off a near-record-high year for acreage.

“Our acreage goes up and down every year,” Kelley said. “Last year, 2023, was the second-highest acreage we’d had since the early 1950s.”

He said profitability was likely the main driver for growers moving away from corn throughout the region.

“It looks like the whole Southeast was off quite a bit — 15 to 27 percent,” Kelley said. “The Mid-South was down 20-27 percent. So, it looks like most of our surrounding states had the same mindset.”

Similarly, wheat acreage was down in the East, falling in all but seven states.

Hunter Biram, extension agricultural economist for the Division of Agriculture, also said the drop in Arkansas corn acres, paired with a rise in soybean acres, was expected.

“Two factors that typically influence this shift are crop rotations and expected margins, with expected margins likely the driving force behind any acreage shifts beyond normal,” Biram said. “Last year, corn margins were far more favorable compared to soybeans, and that showed up in not only the Prospective Plantings report but also in the Crop Acreage Report released last June.

Over the past 20 years, soybean and corn acreage have both grown in the United States, with corn typically leading by as much as 50 percent some years. Over that span, however, soybean acreage has tightened the gap, actually tying the national acreage in 2017 at about 90 million acres each.

“This year, soybean margins appear more favorable, albeit not by much compared to corn,” Biram said. “Last year, the favorable margins were mostly driven by a relatively high corn-to-soybean price ratio, meaning corn prices were much higher relative to soybean prices. This year, there isn’t a crop price to get too excited about, but prices for key fertilizers have fallen to levels similar to the period prior to the Russian invasion of Ukraine.”

Projected Arkansas hay harvests appear to be keeping pace with the previous year, with growers expecting to harvest about 1.15 million acres, 99 percent of 2023’s total.

Arkansas long grain rice surges, medium grain falls back

Arkansas intended rice acreage shifted only slightly, growing 1 percent over 2023 acreage to 1.45 million acres. However, grower sentiment appeared bullish on long grain rice, jumping 11 percent from 2023 acreage to a projected 1.36 million acres, while pulling back on medium grain, falling by 58 percent to just 90,000 acres.

Nationally, planned rice acreage grew 1 percent to more than 2.93 million acres.

Jarrod Hardke, extension rice agronomist for the Division of Agriculture, said the report’s outlook for rice was in line with spring estimates.

“Long grain rice appears to be a profitable option, but seed supply issues are hindering further increases in acres,” Hardke said. “Medium grain is in lower demand for this year with few contracts or pricing premiums available in the wake of high acres and production last year.”

Biram added that the ambiguity of global markets is likely affecting acreage decisions.

“Among many drivers in rice acreage, one could be the possibility that India reverses their export ban on non-basmati rice, which was put in place in July 2023,” Biram said. “While that proved to be favorable for rice prices in the short run, with some cash prices reported at over $8 a bushel in the post-harvest window of January and February, the new crop futures contracts for rice are already indicating prices could land around $6.75 per bushel or lower. This is because when export supply is reduced in the global market, prices increases.

“Conversely, when export supply increases due to a lift on an export ban, for example, prices fall,” he said. “Perhaps producers were able to lock in price guarantees through area crop insurance, such as Enhanced Coverage Option or Margin Protection, trying to capture the tail end of a months-long price rally driven by the export ban. Otherwise, I suspect crop rotations and less-favorable corn margins are driving the increase in long grain rice acres.”

Arkansas soybeans rise steadily

Arkansas soybean acreage grew slightly, rising 4 percent over 2023 to 3,100 acres. This puts the state’s growers slightly ahead of the national soybean acreage outlook, which rose 3 percent to about 86.5 million acres.

Jeremy Ross, extension soybean agronomist for the Division of Agriculture, said it was no surprise to see Arkansas soybeans return to the “plus side” of 3 million acres.

“Historically, we’ve been above 3 million acres for the last several years, other than 2018-2019,” Ross said. “That’s when we had a lot of rainfall — the fall of 2018 and progressing into 2019. We had a lot of flooding issues, and 2019 was the lowest soybean acreage we’ve had since 1960.

“I think all of it points to China,” Ross said of the high acreage numbers. “China is our No. 1 destination for soybean exports. As their population increases, the demand for soybeans increases.”

He said much of 2023’s outstanding soybean yield was due to growers taking advantage of the early planting window, and that he foresees a similar fortune this year.

“Beans have been planted for almost a solid month in Arkansas,” Ross said. “Some of them look good, some not so good, mainly due to cooler weather. We had pretty much the earliest start ever last year, and we had record yields. I think some guys proved that when your beans are planted earlier, the yield potential is a lot better than delayed planting.

“Over the next seven days or so, it looks to be warm and dry, so I think there’s going to be a lot of land prep, and maybe some more beans planted,” Ross said Thursday. “I’m anticipating another good year.”

Peanuts hold, cotton grows

Arkansas producers appear to be holding steady, again planning to plant 35,000 acres of the legume, the same acreage as 2023.

Travis Faske, extension plant pathologist and acting peanut agronomist for the Division of Agriculture, said that peanut acreage throughout the state will likely be higher than the reported intentions.

“I still think we will be a few thousand acres north of 35,000 acres by the end of planting season, as the two primary peanut buying points in the state have indicated an increase in acreage,” Faske said.

Planned Arkansas cotton acreage grew 6 percent over 2023 numbers to 540,000 acres. This exceeded the national outlook, which grew 4 percent to more than 10.6 million planned acres.

“I suspect the reason cotton acreage increased by 6 percent is because cotton lint prices are more favorable compared to last year, but nothing like what we saw in 2021-2022,” Biram said.

“While crop rotations can explain most of the corn-soybean rotation, cotton acreage can likely be explained by the fact that a cotton farmer is going to farm cotton regardless of the price, due to the lack of versatility in equipment used to produce cotton,” he said. “The cotton lint price may shift acreage, but the degree of that shift will depend on what the cotton lint price is.”

To learn about extension programs in Arkansas, contact your local Cooperative Extension Service agent or visit www.uaex.uada.edu. Follow us on X and Instagram at @AR_Extension. To learn more about Division of Agriculture research, visit the Arkansas Agricultural Experiment Station website: https://aaes.uada.edu/. Follow on X at @ArkAgResearch. To learn more about the Division of Agriculture, visit https://uada.edu/. Follow us on X at @AgInArk. 

Census of Ag shows increased spending on cover crops, more no-till acres

By Mary Hightower
U of Arkansas System Division of Agriculture

File photo of Hunter Biram speaking at a conference. (U of A System Division of Agriculture photo)

LITTLE ROCK — More farmers seem to be adopting cover crops and no-till, according to data from the 2022 Census of Agriculture.

“Cover crops expense is up across the United States, which suggests farmers are adopting more climate-smart practices, whether it be for participation in the carbon market, participation in government programs, or to rebuild and maintain soil health to conserve the land upon which they farm,” said Hunter Biram, extension economist for the University of Arkansas System Division of Agriculture.

“According to the Ag Census, there were nearly 18 million acres that have cropland planted to a cover crop in 2022 compared to 15.4 million acres reported by the 2017 Ag Census,” he said. “In Arkansas, there were about 20,000 more acres planted to a cover crop on a little over 100 more farms compared to the 2017 Ag Census.”

Biram said the number of farms on which no-till practices were used increased by nearly 21,000 across the United States on about 750,000 more acres compared to 2017.

“There were also about 6.6 million fewer acres upon which intensive or conventional tillage practices were used,” he said. “These patterns were mirrored in Arkansas at 23,600 more acres under no-till practices and 379,000 less acres under conventional tillage practice.”

Arkansas reported 3.7 million acres of cropland acreage under conservation practices across all categories of cropland acreage. This is an increase of over a half-million acres compared to the 2017 Ag Census.

‘Something’s got to give’

One farmer who has made the change is Greg Hart, who grows corn, wheat and soy, and raises cattle in Conway County in the sandy bottoms of Cadron Creek.

Greg Hart, right, and his brother Todd, left. The two farm as Hart & Sons Farm LLC, in Conway County, Arkansas. (image courtesy the Hart family)

“I'm always trying to find a better way of doing things,” Hart said. “Several years back when diesel fuel got to be $3 to $4 a gallon for farm fuel and fertilizer was up to $1,000 a ton, you look around and think, ‘how am I going to keep doing this? Something’s got to give.’”

He was already using cover crops in his cattle pastures and moved to cover crops and no-till for all of his crops. He’s seen the amount of soil organic matter increasing and has been able to reduce the amount of herbicides and fertilizers he puts into the fields.

However, “the single biggest benefit is the water-holding capacity,” he said. When the drought hit in 2023, “I thought these beans were going to burn up in no time. They stayed green and they kept growing for three weeks when a lot of people’s beans were just hurting bad.

“Two or three weeks of that flash drought is all it takes to kill a crop,” he said. Having that water holding capacity might mean losing “five bushels instead of 50 and that right there is the difference between making money and losing money.”

ROLLIN' — Planting into rolled ryegrass is part of Greg Hart's use of cover crops and no-till tactics on his Conway County, Arkansas, farm. (Image courtesey Greg Hart)

The increased water-holding capacity has decreased the “amount of times you have to water and how much diesel you’ve got to burn to water” ground set up for irrigation, Hart said.

Moving to no-till and cover cropping does require some changes.

“When people get done harvesting they kind of want to be done for the year,” Hart said. “But basically you have to plant another crop.”

Hart’s no-till approach has been so successful, “we actually have sold the tillage equipment and added better residue management to our combine.”

No-till doesn’t look like conventional farming which starts with a clean field.

“I was literally planting corn in rye that was as tall as the tractor cab,” Hart said. “Your mind is thinking, ‘this isn’t going to work.’”

The cereal rye, or other cover crop, then gets flattened by a roller.

“It looks like you laid a blanket on top of the ground and as soon as that soil warms up enough, little plants, they just start popping up through that mat and within a week I mean they're just off to the races,” he said.

Fewer tractor hours

Nick Moore, who grows corn, wheat and soybeans in the Arkansas River bottoms in Conway County, said no-till slows the flow of money out of his operation and “just saves hours in the day.”

“It’s not like I’m fishing more,” he said with a laugh, but “we went from putting 900 to 1,000 hours a year on a tractor. Now maybe you spend 100 to 300 hours. It’s due to not having to plow every acre like we used to.”

Edward Moore with his grandson. Moore is father to Nick Moore, a Conway County farmer who uses no-till in his operation. Moore, 66, still gets to run the tractor on acres where no-till isn't the right fit.  (image courtesy the Moore family)

For Moore’s operation, tilling is now confined to smaller 20- to 40-acre plots — areas where he conducts row irrigation.

“My dad, Edward Moore, who’s in his late 60s, has been on the tractor all his life. He’s from that generation where you till everything,” Moore said. “He gets those little 20s and 40s and he’s like the kid in the candy store.”

Like Hart, Moore appreciates that the no-till residue “might slow the evaporation some,” even if it doesn’t protect against a two-month-long drought. He’s also good at keeping soil temperatures a little cooler in the summer, though in spring that same effect “kind of stunts the corn a little.”

Benefits to farmers

Trent Roberts, professor of soil fertility-soil testing, said both cover crops and use of no-till can be beneficial.

“I believe the biggest benefit from cover crops and increased soil health is input reduction,”  Roberts said. “Very few producers will see an increase in yield on irrigated ground, but many see yield increases in non-irrigated ground.”

For farmers, “inputs” include items such as fertilizer, irrigation, fuel, seeds and herbicides.

However, “after several years of cover crops and no-tillage, farmers are able to reduce inputs while maintaining yields — therefore increasing profitability,” Roberts said.

Roberts said that “no-till reduces fuel, labor and tractor wear, which is huge and almost always more than covers the costs associated with the cover crops.”

“In many places, farmers are reducing the number of times they have to irrigate from six to eight times down to three to four times, which is a huge cost and water savings,” Roberts said.

Weed management

No- and low-till systems can help farmers manage weeds, said Tom Barber, a weed scientist who is extension’s interim head of agriculture and natural resources for the Division of Agriculture.

 “Cotton and soybean farmers seem to be the most interested in cover crops for various reasons,” he said. “We have several years of data showing that cover crops, specifically cereal rye can be a very effective cultural practice to manage multiple herbicide-resistant Palmer amaranth, better known as pigweed. Cover crops such as cereal rye also aid water infiltration into the soil and prevent wind/sand damage when cotton and soybean are in seedling growth stages.  

“No-till is not as common as reduced tillage across the state, but both can help reduce weed emergence,” Barber said. The downside is that no-till systems rely mainly on herbicides for weed control, especially if a cover crop is not planted. 

“This significantly increases herbicide applications and exposure and thus, aids in the development of herbicide-resistant weeds, therefore it becomes more critical to utilize cover crops on these no-till acres,” he said. 

If farmers are considering shifting to no-till production practices, proactive management plans for troublesome herbicide-resistant weeds such as pigweed should be in place prior to making a major shift in current production practices.

Find more information about using cover crops online. 

The Census of Agriculture, published by the U.S. Department of Agriculture’s National Agricultural Statistics Service, offers a very broad snapshot of the farming sector in its 757 pages. The latest version, 2022 Census of Agriculture, was released Feb. 13. The previous version was released in 2017.

To learn about extension programs in Arkansas, contact your local Cooperative Extension Service agent or visit www.uaex.uada.edu. Follow us on X and Instagram at @AR_Extension. To learn more about Division of Agriculture research, visit the Arkansas Agricultural Experiment Station website: https://aaes.uada.edu. Follow on X at @ArkAgResearch. To learn more about the Division of Agriculture, visit https://uada.edu/. Follow us on X at @AgInArk.

New Census of Ag points out differences in risk protection

By Mary Hightower
U of Arkansas System Division of Agriculture

LITTLE ROCK — Data in the new Census of Agriculture has pointed out some significant differences in risk management programs for farmers, said Hunter Biram, extension economist for the University of Arkansas System Division of Agriculture.

The Census of Agriculture, published by the U.S. Department of Agriculture’s National Agricultural Statistics Service, offers a very broad snapshot of the farming sector in its 757 pages. The latest version, 2022 Census of Agriculture, was released Feb. 13. The previous version was released in 2017.

The USDA Risk Management Agency’s “Crop Insurance appears to provide more risk protection than the Agriculture Risk Coverage and Price Loss Coverage programs offered by the Farm Service Agency,” Biram said.

Hunter Biram: Census shows differences among risk protection options for farmers. (U of A System Division of Agriculture file photo)/td>

Agriculture Risk Coverage and Price Loss Coverage, better known as ARC and PLC,  are offered by FSA to provide financial protection to farmers against drops in crop prices or revenues. On the other hand, Crop Insurance, provided by private companies and subsidized by USDA’s Risk Management Agency, provides coverage against production losses due to drought, hail, frost, hurricanes, excessive moisture, fire, insects, plant disease and other causes.

Biram said the differences between ARC/PLC and crop insurance are “indicated by nearly double the average payments per farm for crop and livestock insurance payments — increasing from $26,388 to $52,819 per farm” since the 2017 census.

Another category that saw increases were government payments from conservation programs, as well as loan deficiency and disaster payments.

“Government payments per farm averaged around 55 percent more between 2017 and 2022, increasing from $13,906 to $21,599 per farm,” Biram said.

“This is driven by myriad factors such as the fact that the most popular crop insurance programs offer a farm-level revenue trigger, compared to FSA programs which provide county-level revenue trigger, so you get more specific, more tailored protection from Crop Insurance relative to ARC or PLC,” he said. “Another driver is the fact that Price Loss Coverage payments have waned across all major program crops in recent years, even in rice.

“Soybeans have never received a PLC payment. Corn and Seed Cotton have received a few PLC payments. There is a chance rice and peanuts do not trigger a PLC payment for the third year in a row.,” he said.

PLC is administered by FSA under Title 1, the commodities portion of the Farm Bill, while federal crop insurance is administered by the Risk Management Agency. For a summary of this public-private partnership, see The Structure of the U.S. Crop Insurance Industry.

For a deeper dive, Biram also has a workbook called the Fundamentals of Federal Crop Insurance.

Census history

The first Census of Agriculture was conducted by the Census Bureau in 1840 across 26 states and the District of Columbia. In 1997, the task was transferred to the National Agricultural Statistics Service and now encompasses all 50 states plus Puerto Rico, Guam, the U.S. Virgin Islands, American Samoa and the Northern Mariana Islands.

Information in the census can be viewed by national, state and county levels, as well as congressional districts, watersheds and zip codes.

To learn about extension programs in Arkansas, contact your local Cooperative Extension Service agent or visit www.uaex.uada.edu. Follow us on X and Instagram at @AR_Extension. To learn more about Division of Agriculture research, visit the Arkansas Agricultural Experiment Station website: https://aaes.uada.edu. Follow on X at @ArkAgResearch. To learn more about the Division of Agriculture, visit https://uada.edu/. Follow us on X at @AgInArk.

YEAREND: War, weather drive 2022 ag rollercoaster

By Mary Hightower

LITTLE ROCK — Markets seeking stability after a year of COVID found new turbulence in 2022 as war erupted in the Ukraine and Mid-South farmers found themselves on a weather rollercoaster ride.

WEATHER — Widespread drought and a rainy planting season took farmers on a rollercoaster ride in 2022.

A spring with too much rain, followed by a summer of too much drought, overshadowed any market optimism going into planting time.

“As farmers were in the field preparing to plant their crop, Russia invaded Ukraine fueling uncertainty across the world and in agricultural input markets,” said Hunter Biram, extension economist for the University of Arkansas. “We saw prices paid for chemicals, fertilizer, and fuels increase by about 10 to15 percent over 2021 after there was a 30 percent increase in the prices paid for chemicals, 60 percent increase in prices paid for fertilizer, and 50 percent  increase in the prices paid for fuels relative to 2020

“Any potential relief the high commodity prices provided was essentially eliminated by these increases in input prices,” Biram said.     

According to the 2023 Division of Agriculture crop enterprise budgets, nitrogen fertilizer is projected to be about 6 percent lower relative to 2022 but still 14 percent higher relative to 2021. Phosphate and potash are projected to be up some over 2022 at around 1.6 percent and 0.5 percent higher, respectively. Diammonium phosphate, known as DAP, and defoliant, key inputs used in cotton production, are projected to be up 7 percent and 10 percent respectively over 2022. Insecticides and fungicides, which are key inputs used in rice production are projected to be up 98 percent and 18 percent, respectively, over 2022.  

Spring rains came — lots of it — as farmers were getting crops in the ground, slowing progress and worse, “causing a great deal of yield loss. According to the U.S. Department of Agriculture Risk Management Agency,  of the $1.4 billion in rain-related losses across the U.S., $0.4 billion were primarily in the Mid-South states,” Biram said. "In Arkansas, we saw $171 million in losses account for half of the total coverage purchased in 2022. Prevented planting claims were the primary driver of losses with 81 percent of the losses directly attributed to prevented planting." 

Economist Hunter Biram

Too much water turned to too little as summer began. Farmers in Arkansas had to make some tough choices.

“Drought struck the entire United States which resulted in significant crop losses in Texas, Oklahoma, and parts of the east coast,” Biram said. “Of the $3.9 billion in total drought-related losses across the U.S., $2.4 billion were in the Southeast.”

Arkansas weathered the drought better than other states, thanks to irrigation. Arkansas ranks third nationally in terms of acres under irrigation. However, the drought would find another way to hit farmers in Arkansas and elsewhere, as it dropped the Mississippi River to historically low levels. The levels were so low, the river was closed to traffic between Osecola and Greenville, Mississippi. Elevator prices followed the river levels.

“These price losses at the local grain elevator came in the form of extremely weak basis during arguably the most unfortunate time: harvest,” Biram said. “During the usual harvest window, basis or the local cash price less the relevant futures price, fell from about 40 cents over to 125 under at Helena, Arkansas.

“Once the river levels increased, basis strengthened to about 50 over and has stayed relatively consistent at this level even though most new crop delivery from the 2022 harvest is finished,” he said.

According to the November estimates from the National Agricultural Statistics Service, Arkansas corn was expected to yield 176 bushels per acre, down from 184 bushels per acre in 2021. Cotton was forecast to yield 1,166 pounds per acre in 2022, compared to the record-setting 1,248 pounds per acre in the previous year. Peanuts were expected to yield 5,000 pounds per acre, same as 2021. All rice was expected to yield 7,450 hundredweight per acre in 2022, down from 7,630 the previous year. Soybeans were expected to improve on 2021, rising to 53 bushels per acre — which would be a new state record average yield — up from 52 bushels the previous year.

To learn about extension programs in Arkansas, contact your local Cooperative Extension Service agent or visit www.uaex.uada.edu. Follow us on Twitter and Instagram at @AR_Extension. To learn more about Division of Agriculture research, visit the Arkansas Agricultural Experiment Station website: https://aaes.uada.edu. Follow on Twitter at @ArkAgResearch. To learn more about the Division of Agriculture, visit https://uada.edu/. Follow us on Twitter at @AgInArk.