If you are interested in the farm economy, August is a great time of the year. Here at NASS, we start the month by putting out an analysis of farm production expenditures. In other words, how much does it cost to produce our foods, fuels, and fabrics. On the next day, we publish a report on the value of farmland in the United States and how much it costs farmers and ranchers to rent an acre of cropland or pastureland. This year, each one of the reports told a unique story.
While the nearly $400 billion that U.S. farmers spend to produce food and fabric in 2014 is already staggering, it is even more interesting to see what is happening in the livestock sector. While feed has been the leading expense for farmers for a while now, the rest of the livestock expenses stayed on par with the other farm-related costs. For example, in 2010, U.S. farmers spent $24.4 billion on livestock, poultry, and related expenses, which was less than total rent costs and comparable to the $21 billion spent on fertilizer.
In the last five years, however, that category has skyrocketed. Livestock, poultry, and related expenses grew to $45.1 billion in the last five years, to nearly second place when it comes to production costs. That’s an increase of almost 85 percent in just 5 years. Coupled with $63.7 billion spent on feed that year, U.S. farmers and ranchers now spend more than $100 billion on livestock-related expenses.
Along with this great increase in costs, our Land Values report tells us unique stories about agriculture in different regions of the country. Going against the trend, California farmland seems to have successfully persevered during this drought-plagued year and the farmland values in that state went up 5.5 percent to $7,700 per acre. With the decline in crop prices, for the first time since 2011, we saw a corresponding decline in land values in the Corn Belt region. That decline was mainly driven by a 5.9 percent drop in farmland values in Iowa. Despite the overall decline, however, we saw strong growth in Missouri, where the values were up to an average of $3,350 per acre.
So as you can see, farm economics are as complex and changing as the weather, and every report tells everyone how farmers are doing financial compared to other times and places. As we continue this “month of economic data,” you can still look forward to the Farm Computer Usage and Ownership report, which is coming out tomorrow, and finally to the results of the Tenure, Ownership, and Transition of Agricultural Land (TOTAL) survey, which we conducted as part of the Census of Agriculture program. You can expect TOTAL to bring forth a lot of valuable data as this is the first time we surveyed landowners since 1997. We’ll publish TOTAL data at www.agcensus.usda.gov to wrap up this exciting month for us on August 31.