Agricultural Economics Emerging Issues in Agriculture
Macroeconomic Conditions • Weak overall economy • affecting demand for most all ag commodities – especially hitting dairy and livestock producers. Equine sales are also down drastically. Domestic and international demand. • Unemployment • Impacts on demand, off-farm job prospects
Macroeconomic Conditions • Continued focus on business planning, marketing education, new business development • Moneywise - The MONEYWI$E financial management website is a cross disciplinary approach to assist extension clientele in decision-making in today’s economy. • Annie’s Project – Annie’s Project is a risk management education program designed specifically for farmwomen.
Economics of Production Agriculture • Rising input costs – still an issue, although is has improved. Especially Potash. Greatly affecting production costs on hay, which is hurting cow-calf operators as well. • Price volatility – We just aren’t used to dealing with this much volatility. We need to work with farmers on marketing plans incorporating price risk management - futures markets and livestock and crop price risk insurance. • New Crops and Diversification – Horticulture, switchgrass, organic grains require new cost and market assessments.
Economics of Production Agriculture – Rising Input Costs • Optimal fertilization rates for corn (possibly wheat): Significant fluctuations in both commodity and N prices have occurred in the last three years making this issue more relevant than in the past. • Labor – Changing H2A program will boost labor costs even more, especially impacting labor intensive enterprises like tobacco, horticulture.
Economics of Production Agriculture – Price Volatility • Cow-calf profitability – Cow-calf operators are in about their 3rd tough year. Long run planning needed, such as cattle numbers and strategies to survive a brutal phase of the cattle cycle. • Grain price volatility – Continuing impact of ethanol, uncertainty of support programs, political environment, emerging renewable fuels. • Tobacco contract reductions – Structural changes in industry
Economics of Production Agriculture – New Crops and Diversification • Emerging market channels – Auctions, direct markets, thin markets where prices for specialty products are hard to discover. Grapes, nursery, organic, and other high-value attributes especially volatile.
Economics of Production Agriculture – New Crops and Diversification • Sustainability – Economics of alternative production systems for livestock, dairy, grain, horticultural crops. • Animal Welfare • Environmental Stewardship Mandates • Legislative and market mandates for sustainability • Implementation challenges for producers