Farm business economics report, 1995

258 Pages·1997·19.8 MB·English

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Report, 1995
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ESSA PESV SO RDD RASAA D RESET a aN RR ET RRO ELEE E TEI ELE RES IEI EC MAN DEEA ES ISAT ESAT WUET UESE E SE EER EED
Farm Business Economics Report, 1995. Rural Economy Division, Economic Research
Service, U.S. Department of Agriculture. ECI-1996.
Abstract
The farm sector remained financially strong in 1995, even though farm sector income was
lower than in 1994. The value added to the U.S. economy by the farm sector declined $12.5
billion from that of 1994. Lower output, combined with $6.4 billion in additional expenses,
accounted for most of the fall in net value added. Although crop sales rose almost $6.3 billion
in 1995, a significant share of the increase came from inventories of crops produced in 1994's
bumper harvest, sold at rising prices, and not from 1995 output that could be counted in 1995
value added. Commodity cost and return estimates show that higher 1995 prices led to higher
per acre returns for corn, wheat, and rice, despite lower yields and higher expenses. Farm
equity continued to increase, as it has since 1990, with asset values rising faster than farm
debt. Farm assets came close to a trillion dollars, and although debt increased to $151 billion,
equity pushed upward to $827 billion. These are some of the highlights of this report, which
provides data and commentary on the income and finances of the farm sector, at both the
national and State level, and estimates of production costs for major field crops, livestock,
and dairy.
Keywords: Net value added, net farm income, net cash income, production expenses, cash
receipts, government payments, farm assets, debt, equity, costs of production, enterprise costs
and returns
Acknowledgments
This publication benefited from the critques of David Harrington, James Ryan, Paul Westcott,
Gerald Schluter, and Jerome Stam.
September 1997
Washington, DC 20005-4788
Preface
Farm Business Economics Report, 1995 is the second edition of farm business statistics published in this
format. Prior to 1994, these data would have been found in three separate documents within the Economic
Indicators of the Farm Sector series: (1) National Financial Summary, (2) State Financial Summary, and
(3) Costs of Production—Major Field Crops, & Livestock and Dairy. Part I of this publication covers
national- and State-level farm income and financial balance sheet numbers. Part II provides the cost of pro-
duction estimates for major crops and livestock.
This publication was prepared jointly by the Farm Business Economics Branch's Farm Income Team and
Cost of Production Team. The Farm Business Economics Branch is part of the Rural Economy Division,
one of five divisions within the Economic Research Service dedicated to providing the public with timely
analysis and information on the economics of the agricultural and rural sectors.
Principle contributors to this report are:
Telephone: E-Mail Address:
Branch ChiefssinmOonnson eyote eese ee [phone] jimjohn @econ.ag.gov
Farm Financial Accounts
Team) Leader Roser stnckland 20.25... ees ere [phone] rogers @econ.ag.gov
Value agded---hocer Strickland teacerecs apecpee eeer [phone] rogers @econ.ag.gov
GherylStecle. nt etree eeeee e [phone] cherylj @econ.ag.gov
Cash receipts=—learry et alib teziyeoec eeeret etaee o-mec o e [phone] [email protected]
Cherviesteclesia toneeee , ee [phone] cherylj @econ.ag.gov
Government payments, CCC loans—Pat Vines.............. [phone] patvines @econ.ag.gov
Production expenses—Christopher McGath...............000. [phone] cmcgath @econ.ag.gov
Sales class and type of farm—Linda Foreman............... [phone] farmer @econ.ag.gov
Farm balance sheet, financial rattos—Ken Erickson......(202) 219-0799 erickson @econ.ag.gov
Farm debt—Jim RY all fet er ees [phone] jimryan @econ.ag.gov
Costs of Production
Team Leader: Robett McElroy 2.2 ee [phone] rmcelroy @econ.ag.gov
Data Coordinator—Agnes Prentice.............sceseeeereeeeees [phone] agnesp @econ.ag.gov
Corn, soybeans, and hogs—Bill McBride ..................... [phone] wmcbride @econ.ag.gov
Grain sorghum and peanuts—Nora Brooks.................0.. [phone] nbrooks @econ.ag.gov
Barley, wheat, and sugar beets—Mir All.................006 [phone] [email protected]
Ricerandioats——Janet Livezey in eee [phone] jlivezey @econ.ag.gov
Sugarcane and sugar processing—Robert McElroy ....... [phone] rmcelroy @econ.ag.gov
Cotton and tobacco—Dargan Glaze... ........:c.sseserssrsoneoee [phone] dglaze @econ.ag.gov
Dairy and’ cow-calf—Sara Short oii scsssesserarseesesonrenes s( 202) 501-8315 sshort @econ.ag.gov
Editor: Dinda Hatcher. pecs rccccssneuee ee [phone] lhatcher @econ.ag.gov
Publication Coordinator: Dave Peacock ............c cesses [phone] dpeacock @econ.ag.gov
Support group:
Computer programming—Helen Devlin, Phil Friend
Statisitical assistance—Bessie Jones, Laverne Creek
ii | Farm Business Economics Report, 1995 Economic Research Service/USDA
Contents
Page
BEU SERS UL Gsl rcecertctesseereteritstesecscaterteteces ttrtevttrsceatesccacstesesecsccesecteescsiclobeeeeleenccccucneccecncscccccscjeseses Vv
MEISUEOLMLADIGS teesc vesesvonctesretcet aesestt erscseecsssstccserscesccsoeeseisascdecessctacehecrestcecootvsadtocs eortsessecsteseecetcase es Vili
DOC MIIDUTLALV ie seestcesencntesrreet reayt ecnett errapeecrecitensscaoterereene crecc cacuetcccoscoeocorcostisetesccececssdusschteewnecnbreds as XIV
Part I: Farm Income and Farm Financial Balance Sheet
Chapter 1: National Farm Income Estimates, 1995
Net Value-Added and Net Farm Income Down in 1995, With Record Cash Receipts....... 2
Chapter 2: State Farm Income Estimates, 1995
Most States Earned Lower Net Farm Incomes in 1995 .0.......cccccccccccccsccccecececcseeesecccceescccees 16
Chapter 3: Farm Sector Balance Sheet, 1995
MALIM EA sccismiDCOUSANCACOUILyEW PD ITM 90) semester ttette: serett ots tescazlesaceccseclaciscsseossacseeeseacse s 50
Chapter 4: Farm Sector Financial Performance Measures, 1995
Financial Performance Remains Strong in 1995, Even With Lower Farm Income............ 80
Chapter 5: Farm Income Estimates by Sales Class, 1995
U.S. Has Many Small Farms, but Bigger Farms Account for Most Farm Production ....... 96
Chapter 6: Government Payments, 1995
Government Payments Lower Under Last Year of Old Program. ...............ccccccecesseessseeees 100
Chapter 7: Farm Sector Debt, 1995
Bal mESectomle Dak Oscro4 ESN IOM Niel OOS er terecee ser iiserintrsiscseseitssesessasasdlchsscosnadesseosnsvons 110
Part II: Costs of Production—Major Field Crops, Livestock, and Dairy
Chapter 8: Costs of Production by Commodity
Higher Grain Crop Prices Led to Higher Cash Returns, From Fewer Planted Acres....... 124
Corn—Higher Corn Prices More Than Offset 1995’s Lower Corn Yields ................:00 126
Soybeans—Despite Higher Prices, Gross Value of 1995 Soybean Production
MBT AT) SECM ELlee)y CIBl 94 weer tnt reenter Retesuar sy coresteveeeasssasieiiseynseasvsesalesndestsevesesvtedeteeates 130
Wheat—Higher Wheat Prices Outweighed Slight Yield Declines To Give Higher
PN CE MEN CLUE ISEITISL OO) J eee reine Oretntcc sr rence: scaanutseresecsouiscosbessearvsccsyesarsoucrsidessiavesioes L33
Cotton—Prices Remained High in 1995, but Lower Yields Reduced Cotton Returns ....136
Rice—Large Export Demand, Tight Supplies, and High Prices Boosted
POOS EI CERR CLLETIC MMMM RETR Tete Tee terest ers ncedoctaeeieeaiescceactacess sncsusevastossdzsvcvevasdescsodesse 140
Grain Sorghum—Higher Prices Boosted Gross Production Value, but Net
Gr SIMISCLUTTSU VIX GC MITE sac toc cacat sues. seeccssscces sue seaniccentcssssnstoissecssasnsssooacsasnesansseaiaaa s 144
Barley—Value of 1995 Barley Crop Up 25 Percent Due to Higher Prices... sees 148
Oats—Planted Area Continued To Fall, but Oat Costs and Returns per Acre
ORAM NU ttle emer tetra ence rtcadee yecteeacerveveaererscserereniavestysretetorstosvterporordoweoSeiotecershatsls 152
Economic Research Service/USDA Farm Business Economics Report, 1995 _ iii
Sugar Beets—Rising Input Prices and Lower 1995 Yields Raised per Ton
Production Costs v5) sei. a en
Sugarcane—Cash Expenses for Growing Sugarcane Up About a Dollar
per Acre in’) 1995.0. cieticcctescsoeee paern ceetrse grseeas etn tseta sgeectee ate
Peanuts—Value of Peanut Production per Acre Fell Dramatically;
Cash Expenses Felb Only Slight]V arn n ceeen errr eee te nee
Tobacco—Lower 1995 Warehousing and Marketing Charges Helped Hold or
Reduce Prodtiction Costs % Sercee oeere ne e en eee
Milk—Lower Feed Costs Offset Milk Price Declines To Raise Cash
Returns'in Some: Regions ener. er cee ene reer eee ee ee
Hogs—Farrow-to-Finish and Feeder Pig-to-Finish Operations Earn More, but
Returns.toj Feeder, Pigs DOW meric en. ea eeccrcese tee rere tartar,
Cow-Calf—Returns Fall Further for Cow-Calf Operations in 1995 0.0.0...e ee
Appendix: Cash Receipts by State
Appendix Table
POCOSSOOOO OOO OOOOOSO OOOOH LOSS OOOO S OOOO OO SS OSH SOO OSOSS SOO SOSSOOSOSOSSOSSSSSOSSSSSTSSOOSOSOSS OSES OOO SESOSSESOESS
iv Farm Business Economics Report, 1995 Economic Research Service/USDA
List of Figures
Figure
Page
Part I: Farm Income and Farm Financial Balance Sheet
Chapter 1: National Farm Income Estimates, 1995
1-1 Value added, net farm income, and net cash income, 1990-95.......ccccccccceccccececececcecesee 9
1-2 Waluceadde dabyedeticulturalproductionset990=95 ne, sfc ry.deb.se-deliscesstsceesidereeseasssenn 9
1-3 Cash Teceiptsnrond cropsrandsliVestocks 1990-95 oo v.csenccsscssseneccocteoscorssceeecersdsseescesces 9
1-4 Gorm; soybeans, and wheat production, 1990-95 77)... icici. iless.scdeflecseseescechovtauesss. ¥
1-5 NOUTCE SOlsOTOSSsCaslsiNiCOllic ho ()-0) Sm mmenmc<enSasNhe Fenta tvesaS lacrllttateeitelnessoedesnedel es 9
1-6 Gross farm income, expenses, and net farm income 1990-95 .........ccececececessesseesseees 9
1-7 INIOUEDV ECO ID UICC Smo AealiGEL OO SemeaeaMeret tee ett. eennact. cfotc.d sneetialCn csdst ocda tes 10
1-8 Montnlyan leat prices slo O4rancd gO ap sae, aenrceaeeece, Sunes ested. en RtCeee ceo. 8licsenacsoecodts 10
1-9 NiouthIv aso. Dealigpiicceswml cO4tanelOOj ena ima res ier ete Mel. A steescltlerossdeceanee 10
1-10 Montalyacotton pricesmloo4 ancdelOOS teerer cian she tt esas 0000... Lblaccelcesdeeeecsveder 10
1-11 MONCH VEDeeteDLiCesmm| GO 4-0.) memmmenutn nea ons Merce etee Waccassverdstisecsssucsiesuratseesdessucsdeesete 10
1-12 Bec lfanGmpOCkmDLOCUCIION MLO 520 Serre at anaes fs MmeNEE fees co.ssecdssessveadudedebecsxussses 10
Chapter 2: State Farm Income Estimates, 1995
2-1 ope lrstatesmankcd by, Netel alm INnCOMe mL 995. yepursess .5.s ecsc esteitee.t.tsns coseeteces 19
2-2 Pope zestatcsutatiked Dy Cash feceiptss: |O OS amen. merrier mer tee a tel. seer ter attss essscere. 1)
2-3 Ope ZeS tatessiny clopycashesales.wl 995 Warsrs 3. a seem Socac. sSerddeocpdetece Gvacdsacsens 19
2-4 Hoel aS tale smleLivestOCkaCaStl TECCIDUS. 199) eeress cement rertets tcee rsarcsssceessevieesessactsoaees 19
Chapter 3: Farm Sector Balance Sheet, 1995
3-1 Farm business equity in current and real (1992) dollars, 1970-95 0... eee eeseeeeee 51
3-2 APMIS e CLOIBASSC EBV ALG BLOG Oke tens cette rns tp tran, 220 es eo nsasestacsosccadascccnveredeineces 51
3-3 IeH ELIS CC LOR CODE MLOO 1-0) \earermeepenen teens ech n aha ee seiieyas o ctinee ste chaste coudessadiesievecaseat ibueed ol
3-4 TeE IEIEAS SC( SEATICUC1C)( MLO LO Sear tee tems enema eet RR. epee cnet ect eectstettseces coerce 51
3-5 PALES CLOTBC CLITY ul 191 <0 De eens tre cere eocne PenS een SPOR tS Geese. fr eaccevteeneracesdve 51
Chapter 4: Farm Sector Financial Performance Measures, 1995
4-1 RACE SROI NTCEUIITL COsASSCLSE LGD= 9 ) mer rere ee rac Pe cst tee ares ilvereh usdosb teblvenessoceass 83
4-2 DS PASSEM ELA LLOS Holic9) ee ee ee eee ce toe c eae ak Ae echaskes eine teccestetescs bacaceomsiant 83
4-3 PASSE CUI OM cleata lClGM l ao) een terteN te ecr en nee eee ce anetis, foceetstorcc-dceesea sans eanassonaecee 83
4-4 tte te stOaFO tss-eCaS l MUCOUS TALLOS LIS D9 eeiarreancsc.sse-srersyececscrecendene sanessesearneateete 83
4-5 Fete DIRSCLYV ICCC OVElAC e FALIOS iLO 129) qtes ere 5: ctosseatettassisuetccstsseecerntecsenseanasese 83
4-6 Dic GIS UIICN CAALIOSIEl OO -Oompeett eta ene vase rary Atearncntccctereectsreesteceocycctarre 83
4-7 Wis AlmteGMI SHO ss Sets OVale CIOMSClECLCC VCalS er. caenveccesteraces-fasccusecsseenaconecese-eerssacece: 84
4-8 We nt (O cis se LLAliOS DY PE@1ON, SClECLEG, YCALS vr1.sesroersessrsnentssecarsencsirseecocesecws:seneeseesces 84
Chapter 5: Farm Income Estimates by Sales Class, 1995
5-1 Number and share of farms by sales class, 1995 .............:ssscccccssrercessnereeseereosensecones 97
5-2 Share of cash marketings by sales class, 1995............csccseceseseseeeserseesesevssseesenscees 97
5-3 Share of government payments by sales class, 1995 .............s:sscseessesesteteeseseesseenees 97
Economic Research Service/USDA Farm Business Economics Report, 1995 v
Figure
Chapter 6: Government Payments, 1995
6-1 Government payments, 198 1-95 cia secceeneslet eeeea teycrn eytst tcenves eeeee a e
6-2 Government payments as a share of gross cash income, 1981-95 0.0...
6-3 Government payments: by, type; 199 1-9 Sine ce. er te nthe are eee ee
6-4 Corn prices and feed grain deficiency payments, 1994-95 oo... eee eeeeeeee
6-5 Government payments to and from the farm sector, 1980-95 00... eee eeeeeeeee
6-6 Top 12 States to receive government payments by type, 1995.0... eee
Chapter 7: Farm Sector Debt, 1995
7-1 US: farm ‘sector, debts selectedsyearsieease cretsiem sceree:s e.t1 eeo errnm eeesnr e
7-2 Debt. capacity utihization[ 1970-95 2oicettera reere oynee ee. tree tenrrem ere tt
7-3 Interest expenses;1970-95 conic, cece sree tema ane nee reeset ene ES
7-4 Top 12.States ranked according to farm debt; 1995 (3 Teeiiceescs) eeeeec eeseeta s
7-5 Total farm debt per acre of land farmed) by State; 1995 ere emrernee rs
7-6 Credit to farm sector by, lender, selectedivearsiyn-y.10 eee ere eee ee
Part II: Costs of Production—Major Field Crops, Livestock, and Dairy
Chapter 8: Costs of Production by Commodity
8-1 Acreage to planted:crops; 1993-OSteaatrerieereer srereence nmeene eeeearm nre,er s
8-2 Prices paid for major.inputs).1991-95 teres eee cone een een er epee nero
Corn
8-3 Net cash returns for:corn, 1991-95277 eeere eeee eee ee
8-4 Corn production regions si.) horse. ccest eines Reena a ett oe mee ete eran renee
Soybeans
8-5 Net cash returns for soybeans,.1994-95 eicce ee cceee rere eeee ren earner ane
8-6 Soybean production f6SiOnsi ce cence ter eeeceecerece etree eth tee ee ee
Wheat
8-7 Net cash returns for wheat; 1994-95 (ort ine veces steer teee te ene en eee
8-8 Wheat production regions ...2.rre-av sces ecerd avcassupecstt c-atse: 2ct eee ese seesn sesnu
Cotton
8-9 Planted cotton acreage, 1991-95 Vater w..sepenre etetrs oyie eceeen aye
8-10 Cotton. production reSiOns vircie vcntecersuent esceess tec tctecent etne cec ecned aese s
Rice
8-11 Net cash returns for rice) 1994-0s e eee renee
8-12 Rice production regions ..22ers.cosreve.-: ocessrees cee eter tea nee ee
Grain sorghum
8-13 Net cash returns for grain’sorghum,; 1994-05 Gime eeeereereee ere eer
8-14 Grain sorghum production resionS-...--2 en
vi Farm Business Economics Report, 1995 Economic Research Service/USDA