Net income up, government support down.
Reader Bruce Hall bewails the plight of farmers. It was of interest to me to see how the massive bribe the Trump administration propped up farm income in the wake of the disastrous trade war, and how cash income has popped up in 2021. Hence, despite lower government support, net income is forecasted to be up.
Figure 1: Contributions to change in farm income from cash receipts from sales (blue bar), from direct government support (brown bar), and from all other components (green bar). Source: USDA, data of 12/1/2021.
In other words, in 2020, the increase in government support ($23.3 bn) more than accounted for the change in net income ($15.7 bn). Where were all the fiscal conservatives at the time that occurred (equivalently, why don’t I hear cries about farm welfare from those avowed fiscal conservatives?)
Here are the sources of farm income, in levels.
Figure 2: Farm income from cash receipts from sales (blue bar), from direct government support (brown bar), and from all other components (green bar). Source: USDA, data o 12/1/2022.
By the way, I do attribute some of the movements in ag prices to the pandemic (fears of which a commentator in March 2020 assured me was overblown), but note that rising government financial support and falling cash income began in 2019, before the pandemic struck (but after Trump’s trade war started).
Love this post so much.
I’m asking this question earnestly, not being smart-aleck, is anyone in the “MSM” (or otherwise) made this point recently?? Because it deems being made and discussed. I haven’t watched Maddow lately, has she discussed this at all??
Aw, come on, man!
You know I merely reiterated what Old Uncle Joe said. He’s the one who ignored the higher farm income to spout “the Narrative” of the big, bad meat processors.
But, hey, I’ll give you a pass on this one.
Happy New Year! It’s going to be sooo much fun.
@ Bruce Hall
Did you want President Biden to subsidize and provide social welfare to meat producers the same way donald trump provided social welfare to farmers?? This is interesting watching a Republican applaud MAGA policies that encourage making farmers dependent on government welfare. Instead of the false “welfare queen” stereotype Reagan manufactured in the 1980s, soon we’ll have the very real life white “Welfare King” farmer driving around in his SUV BMW as he goes to pick up his USDA payment for crops no one wants to buy or eat.
Why not subsidize farmers? After all Bruce is totally dependent on Kelly Anne Conway to pay his rent.
I feel your pain.
You are as unhappy as when Trump was President.
@ T. Loser
You wish. I sleep much better since late January of ’21, thank you for enquiring.
My. MC, LaMalfa, CA 1, has long billed himself a ‘real deal conservative,’ while pocketing millions in government cash, including government payment for crop insurance. He’s ok with the govt. subsidizing rice growers but not consumers, especially needier families. A Welfare King, indeed.
Hey Bruce – your perfect record continues. You get every single thing wrong. Of course you have an excuse. You are just copying and pasting what Kelly Anne Conway emailed you to say.
#1 – the President is not your uncle. #2 – if you are going to quote him, do so accurately and in full. No more cherry picking for Kelly Anne’s Steno Sue.
“That may be six weeks or six months, but Moore is probably right although “roaring” may be overstating the case. … My personal opinion (yes, opinion) is that this crisis is somewhat overblown and will fall into the Ebola, SARS, MERS, sky-is-falling category once more facts and protocols are in place.”
wow bruce hall. this is your quote from march 2020. care to admit you were WRONG, or do you want to simply double down on those predictions.
Bruce Hall is never wrong. He copies and pastes the email from Kelly Anne Alternative Facts Conway precisely.
What are we to make of such articles, in terms of the well-being of farmers and farm-product workers?
https://www.nytimes.com/2021/12/27/business/beef-prices-cattle-ranchers.html
December 27, 2021
Record Beef Prices, but Ranchers Aren’t Cashing In
“You’re feeding America and going broke doing it”: After years of consolidation, four companies dominate the meatpacking industry, while many ranchers are barely hanging on.
By Peter S. Goodman
Photographs by Erin Schaff
https://www.nytimes.com/2021/12/29/business/meat-factories-covid.html
December 29, 2021
On Slaughterhouse Floor, Fear and Anger Remain
Workers say factories are still glossing over virus safety, as the meatpackers that dominate beef production harvest record profits.
By Peter S. Goodman
Photographs by Erin Schaff
https://fred.stlouisfed.org/graph/?g=Gbm8
January 15, 2018
Global price of Beef and Poultry, 2017-2021
(Percent change)
ltr’s charts would be more informative in my view if she just showed the levels:
Here is the global price of poultry, which was much higher before the pandemic than it is now. Yes, we have seen recent increases but this was proceeded by a massive decline:
https://fred.stlouisfed.org/series/PPOULTUSDM
Beef prices may have risen from $1.60 per pound to $2.60 per pound according to FRED but prices were even higher back in 2014:
https://fred.stlouisfed.org/series/PBEEFUSDM
Offal.
https://fred.stlouisfed.org/graph/?g=EGFT
January 30, 2018
Global Prices for Soybeans and Soybean Oil, 2017-2021
(Percent change)
[ The Chinese have now built a 2-year store of basic grains (rice, wheat, corn and soybeans) and are emphasizing increased planting. Research and implementation on improving crop yields is a national focus. Gains for instance in rice yields, are likely to be soon pronounced. ]
Your spin belies reality. Take for instance the fact that US exports of soybeans in 2020 exceeded $14 billion. Plus the fact we sold China over $3.4 billion in meats and poultry. China has a huge population to feed and will likely continue to rely on imported food products.
https://www.census.gov/foreign-trade/statistics/product/enduse/exports/c5700.html
BTW – why do you insist on plotting the change in commodity prices when the more useful information is simply the price over time? You do a lot of hard work here but you overdo it with the insistence on converting useful data to confusing graphs.
Here is the FRED chart for the global price of soybeans – measured in $ per metric ton on a monthly basis:
https://fred.stlouisfed.org/series/PSOYBUSDM
I provided the Macrotrends chart which measures this in $/bushels on a daily basis.
https://www.ers.usda.gov/data-products/farm-income-and-wealth-statistics/documentation-for-the-farm-sector-balance-sheet/
《The relative standard error for production input supplies ranged from a low of 3.4 percent in 2008 to a high of 11.6 percent in 2002. 》
https://www.ers.usda.gov/data-products/farm-income-and-wealth-statistics/general-documentation/
Does MASE ignore the standard error of the “true” value?
Why don’t they report confidence intervals? Are their surveys so inaccurate, the standard errors would be huge? Why must I have Excel before being able to see if their data files even include standard error?
Why do you believe survey respondents will be honest when answering questions about their income, production, expenses, etc.?
What is the refusal rate on their surveys?
Are you reporting noise?
I think the idea is that the Big Four have created a cartel raising prices but squeezing out everyone else in the sector. But yea – the press isn’t always the most analytically accurate.
Can we get back to soybean prices?
https://www.macrotrends.net/2531/soybean-prices-historical-chart-data
Wow – a Biden boom raising the price to over $13.50 per bushel. I guess Kelly Anne Conway needs to instruct her favorite stooge (Bruce Hall) to blame the price increase on Biden the Socialist selling American food to those awful Chinese Communists!
https://news.cgtn.com/news/2022-01-04/Chinese-mainland-records-175-confirmed-COVID-19-cases-16xzPdYYUM0/index.html
January 4, 2022
Chinese mainland reports 175 new COVID-19 cases
The Chinese mainland recorded 175 confirmed COVID-19 cases on Monday, with 108 linked to local transmissions and 67 from overseas, data from the National Health Commission showed on Tuesday.
A total of 54 new asymptomatic cases were also recorded, and 588 asymptomatic patients remain under medical observation.
Confirmed cases on the Chinese mainland now total 102,841, with the death toll remaining unchanged at 4,636 since January last year.
Chinese mainland new locally transmitted cases
https://news.cgtn.com/news/2022-01-04/Chinese-mainland-records-175-confirmed-COVID-19-cases-16xzPdYYUM0/img/b35796c4a21947f1b78b28979d512dd3/b35796c4a21947f1b78b28979d512dd3.jpeg
Chinese mainland new imported cases
https://news.cgtn.com/news/2022-01-04/Chinese-mainland-records-175-confirmed-COVID-19-cases-16xzPdYYUM0/img/d70110f9b9044e1c83ad18559e75a8a3/d70110f9b9044e1c83ad18559e75a8a3.jpeg
Chinese mainland new asymptomatic cases
https://news.cgtn.com/news/2022-01-04/Chinese-mainland-records-175-confirmed-COVID-19-cases-16xzPdYYUM0/img/cd046dc6a6104c6c91177a5d69ba18ec/cd046dc6a6104c6c91177a5d69ba18ec.jpeg
https://www.worldometers.info/coronavirus/
January 3, 2022
Coronavirus
United States
Cases ( 57,075,508)
Deaths ( 848,826)
Deaths per million ( 2,542)
China
Cases ( 102,666)
Deaths ( 4,636)
Deaths per million ( 3)
http://www.xinhuanet.com/english/20220103/66c0743f10f240cdbcbe989bf45e444d/c.html
January 3, 2022
Nearly 2.85 bln COVID-19 vaccine doses administered on Chinese mainland
BEIJING — Nearly 2.85 billion COVID-19 vaccine doses had been administered on the Chinese mainland as of Sunday, data from the National Health Commission showed Monday.
[ Chinese coronavirus vaccine yearly production capacity is more than 7 billion doses. Along with nearly 2.85 billion doses of Chinese vaccines administered domestically, more than 2 billion doses have already been distributed to more than 120 countries internationally. Nineteen countries are now producing Chinese vaccines from delivered raw materials. ]
…the Trump administration propped up farm income in the wake of the disastrous trade war…
— Menzie Chinn
[ What is of especial importance is that the “disastrous trade war” is still being fiercely waged by the Biden administration. ]
Menzie Chinn: “Why don’t I hear cries about farm welfare from those avowed fiscal conservatives?)”
The simply answer is to look a who the farmers are. They are 95% white. Only 1% are African American.
Farmers, like coal miners, are glorified from nostalgia about the past. In reality they represent only a very tiny minority of Americans.
There are only 2 million “farmers” in the U.S. (not to be confused with agricultural workers).
But even that number is misleading. 50% of farmers produce less than $10,000 of food a year from their farms and account for only 1% of total farm output. They are hobby farmers who enjoy their rural life subsidized by taxpayers while they earn their real living from regular jobs.
Half of all food is produced by just 60,000 farmers that earn more than $1 million a year. These 60,000 farmers receive over 40% of all subsidies, averaging more than $500,000 per farmer. This is where most of the subsidies are going, a tiny number of rich white Americans.
And that is the answer to “why don’t I hear cries about farm welfare from those avowed fiscal conservatives.”
https://www.nytimes.com/2021/05/22/us/black-farmers.html
May 22, 2021
‘You Can Feel the Tension’: A Windfall for Minority Farmers Divides Rural America
A $4 billion federal fund meant to confront how racial injustice has shaped American farming has angered white farmers who say they are being unfairly excluded.
By Jack Healy
LaGRANGE, Mo. — Shade Lewis had just come in from feeding his cows one sunny spring afternoon when he opened a letter that could change his life: The government was offering to pay off his $200,000 farm loan, part of a new debt relief program created by Democrats to help farmers who have endured generations of racial discrimination.
It was a windfall for a 29-year-old who has spent the past decade scratching out a living as the only Black farmer in his corner of northeastern Missouri, where signposts quoting Genesis line the soybean fields and traffic signals warn drivers to go slow because it is planting season.
But the $4 billion fund has angered conservative white farmers who say they are being unfairly excluded because of their race. And it has plunged Mr. Lewis and other farmers of color into a new culture war over race, money and power in American farming.
“You can feel the tension,” Mr. Lewis said. “We’ve caught a lot of heat from the conservative Caucasian farmers.”
The debt relief is redress set aside for what the government calls “socially disadvantaged farmers” — Black, Hispanic, Indigenous and other nonwhite workers who have endured a long history of discrimination, from violence and land theft in the Jim Crow South to banks and federal farm offices that refused them loans or government benefits that went to white farmers….
LNG exports hitting records.
https://www.eia.gov/todayinenergy/detail.php?id=50625
This is pretty much just a function of installed liquefaction capacity. There’s a lot of press blabla (not in this article) about how our prices are “connected” to offshore now, but it’s not really true. Except in occasional extreme cases (Covid or very strange weather), those facilities will just run. Capital cost is sunk (yes, even though the facility still being paid for, classic sunk cost). So as long as TTF (Europe) or JKM (Asia) prices are sufficiently above HH (US) to pay for cash cost of liquefaction and transport, those facilities just run. TTF and JKM could go to $100 but the facilities just run same as if they are at $10 (or less). [In some cases, even the cash cost of liquefaction is semi-sunk because of the structure of take or pay contracts.]
Export does prop up US HH prices of course. (Warren is correct on that. Basic supply and demand. Adding 10BCF/d of volume drives up price, even with some supply response along the supply curve.) But it’s just based on volume exported, not the price difference to final markets. And those LNG facilities run all out, unless price diffs get very small.
Will be interesting to see what happens in 2022. Few in construction plants coming on line in 2022. But then a long wait for more. Takes 5 years to do a project. But hasn’t been many new projects started (actually started, not just permitting) since 2018. One I have my eye on is Tellurian’s Driftwood. Gets a lot of press/hype. I’m kind of a skeptic on it. But will be interesting to see if it moves forward to a Final Investment Decision. Or has another “temporary” delay. It’s sort of a dance for what projects get done since there are way more US projects proposed than will get done and sort of a weeding process goes on.
The impression I get is DOE Sec. Jenni G. is walking back from some of the ominous “tools in the toolbox” talk that had the industry concerned. Idling $X-billion (debt-financed) capital facilities, approved under both Obama and Trump, would be a huge event. Of course there’s always some risk (unless you use stranded gas). Australia had issues here, with the government getting unhappy (after facilities built) about offtake. But it’s probably manageable political risk.
It’s not like building a plant in SE Asia or East Africa doesn’t have risks. And despite the very high cost of trade labor on the Gulf Coast, it’s still way cheaper labor versus trucking people to overseas, plus paying “local content rules” in some backwater. And generally safer, better engineering, cheaper vendors (even though very pricey versus light manufacturing like HVAC). The US Gulf Coast has become the center of petrochemical technical ability. Houston is to O&G as Perth is to hard rock mining.