Price index for gross value added in farm sector is falling (cumulative 8% under Trump) while that in the nonfarm business is rising (cumulative 3.5%).
Figure 1: Log price index for gross value added in nonfarm business sector (blue), and farm sector (red), 2017Q1=0. Pink shading denotes period during which China has tariffed US soybeans. Source: BEA 2019Q1 3rd release, authors’ calculations.
Excuse my ignorance, but getting back to Menzie’s (justified) complaint about requests on raw data, can anyone confirm to me this is from Table 8, lines 6 and 7 of the June 27 BEA release?? (obviously before the log price and base quarter were attached). If we can withhold the editorial comments and just confirm or reject that as true I would appreciate it.
Moses Herzog: See interactive data for GDP release, table 1.3.4. https://apps.bea.gov/iTable/iTable.cfm?reqid=19&step=2#reqid=19&step=2&isuri=1&1921=survey
Table 1.3.4. Price Indexes for Gross Value Added by Sector
I’m looking at the annual data going back to 2009 when it was 60.397. By 2013 it had risen to 102.670. I note this because Trump’s Trolls will likely blame Obama for letting this series drop to 63.687 by 2016. Of course Obama did not cause the boom nor the bust. Something to do with “weather” I guess but I want to be careful not to rile CoRev as if we are somehow discussing “climate change”.
Table 1.3.6. Real Gross Value Added by Sector, Chained Dollars
Real gross value added for the farming sector (2012$) was around $200 billion in 2016 but has dropped to $182.5 billion by 2019QI. So in terms of income (not prices) we have a 9% reduction under Trump. Under the Obama years, this series consistently increased.
Thank you Menzie. I know that’s about as elementary as it gets for you, and I wanted to be sure I was looking at the right thing, obviously I wasn’t. I appreciate it.
Now Menzie, you may be getting to where you know me WAY to well. as I’m not certain this is the EXACT data I was looking for—and yet it is the data I was looking for.
You’ve figured out at this point how exceedingly lazy I am yes?? (I so wish I was being facetious there). BEA use 2012 as the base year (right??) and have essentially done the math you probably did yourself, crunching it out with EVIEW or whatever yeah?? BEA is just using 2012 as the base year where you used 2017—but the graph—which all you have to do is click the circle thingy by “farm”—gives a graph VERY similar to yours above.
I noticed when you put the nonfarm “overlayed” on top of the farm (with the BEA app), the drop in “farm” doesn’t look so drastic. Maybe that is where the natural log comes in handy??
Moses Herzog: I usually download data into EViews, then rebase to a base year (this is inconsequential ever since BEA moved to Chain indices, as opposed to implicit price deflators that have some specific base year weights). I usually use something like log(X/@elem(X,2017Q1)) where log is ln, and @elem(#,date) takes the element of series # at a specific time. This rebases everything and puts into log terms which I prefer.
As you have probably already guessed, some of your second reply goes above my head (this is not your error, as you have put it at exact level it will be useful later) due to my own laziness on some of this stuff. However, hopefully as I learn “R’, “Python” or whatever freeware I end up sticking with and hopefully being persistent on, this reply will be HIGHLY useful to me at some point down the road. I’m bookmarking this page link.
i.e. Your efforts to answer me aren’t in vain and will help me avoid a learning bump (learning delay) here soon.
My mind works very weird sometimes (sometimes I think I have super mild Asperger’s or something) and even though I was pretty certain the visual graphic representation looks “less drastic” because the left margin was in log terms (or % change of log terms??) somehow it gives me some kind of emotional assurance to have it confirmed. Thanks again, it’s greatly appreciated.
OK, I know this is Economics blog blasphemy….. Couldn’t resist posting this. I obviously have nothing to do with the taking of the photo. Top 10 coolest music related photograph EVER:
https://i.redd.it/kgas28tl5z731.jpg
I noticed something else as part of my aimless internet wanderings tonight. A lot of the farm data on FRED only goes up to January 2017, that’s about 30 months ago. Is that normal?/ I mean like, are they still compiling data?? What’s going on there??
I noticed similar things when looking at foreign data or IMF data for commodity prices. FRED is only as good as its raw sources which often are less than timely. For example, the Venezuela Central Bank basically shut down all reporting of economic reporting for a while.
Kamala Harris’s record is not very good. And when she gets pressed on it in a debate instead of being handed softballs, it’s not going to go very well for her. And on the very rare times she has been challenged on her record, she’s allowed to circumnavigate and discuss everything but the core question. If Harris gets in an interview like Stephanopoulos did with donald trump in the limousine and in the White House, her poll numbers are not going to hold up I don’t think. When Harris gets asked why she’s gone after black parents for truancy, why she never prosecuted Steven Mnuchin for white collar felony crimes, and why she thought people sitting in jail for minor marijuana offenses was good state policy, her “schtick” to a minority audience isn’t going to go over so well.
https://www.democracynow.org/2019/7/2/kamala_harris_not_a_progressive_prosecutor
https://theintercept.com/2017/01/05/kamala-harris-fails-to-explain-why-she-didnt-prosecute-steven-mnuchins-bank/
Kamala Harris sort of reminds me of the parable “those who live in glass houses should not throw stones”. Is Biden perfect? Of course not – but the cheap shots from her and Cory Booker on race strikes me as the classic Democratic firing squad gig. I think there is a lot to like about Senator Harris but could she stick to what matters today? And even though Booker is virtually a neighbor to me – he needs to drop out of this race now.
Re: Harris. Nice story about the little girl who benefitted from busing/desegregation.
However, on further examination, it’s difficult to imagine the daughter of two Ph.D.’s (research scientist and economics professor…at Stanford) living in the Bay Area owing her early successes to busing to an integrated elementary school (a school that been desegregated before she was born).
And who doesn’t want to revisit the high and low points of busing, 40+ years later? The circular firing squad, for sure.
@ noneconomist
Hahahahaha!!!! Notice how NONE of the TV “journalists” wanted to connect those two seemingly “disjointed” items of Harris’s background together. Sir, you have a pretty good sniffer on the bullshit there.
https://www.youtube.com/watch?v=XadNMpvhkzA
Next Kamala Harris will tell us she was commuting from Oakland to the outskirts of Stockton to pick cotton. “Boohoo!!! Boohoo!!!!” Think about it, she was born in 1964, she would have been age 16 in 1980. She might be able to sell millennials that her early life was so “cruel”. No one who lived the civil rights era and can read is going to buy Harris’s manufactured sob story.
‘Steven Mnuchin’s OneWest Bank for foreclosure violations in 2013’
Mnuchin was involved with this? Anything to make money for his gold digging wife! I thought Mnuchin was one of those Goldman Sachs slime balls. And after all – Hillary made one hell of a speech to them. Is Harris covering up for Hillary?
As much as I dislike the woman I don’t there’s any connection to Hillary there. I don’t doubt she would have returned the back massage had she been elected though.
Donald Trump will not go after her for any of that. Shows she is tough, which she needs to be, and some of that is that was then and this is now, notably pot. Not going to save either Bernie (not going anywhere) or Biden. Actually it is between Harris and the one you really hate, Warren, who will have Trump calling her “Pocahontas” like you all but do, Moses.
Oh, I found something that will give Menzie a big warm fuzzy in his heart:
https://www.washingtonpost.com/politics/trump-says-he-intends-to-nominate-longtime-fed-critic-judy-shelton-to-fill-opening-on-federal-reserve-board/2019/07/02/c85e6364-9d1a-11e9-83e3-45fded8e8d2e_story.html?noredirect=on&utm_term=.bf62f920de47
Shelton on the FED? Back to the gold standard! No wonder Tucker Carlson has been traveling with Trump overseas!
Lots of factors hitting farmers this year. Certainly China’s boycott of U.S. soybeans is one. Then there is the overwhelming precipitation covering the eastern 2/3 of the nation resulting lost or delayed planting. And the late, cold spring ruined a lot of fruit crops. Plus the cost of fertilizer has risen significantly this year.
The good news is the much talked about perpetual drought for the U.S. is over. https://droughtmonitor.unl.edu/
Also, the decrease in agricultural prices isn’t exactly a new phenomenon. https://www.focus-economics.com/commodities/agricultural . Better start raising sheep.
Bruce Hall: Unless you are channeling Raul Prebisch, I take it you mean the last decade. Well, as you and I have discussed on this blog, this has something to do with the dollar’s value. Why is the dollar’s value elevated? Partly because of expansionary fiscal (real tax) policy, which was unwarranted at full employment…who do we have to thank for that?
“Most agricultural commodity prices lost ground in May led by cotton and soybeans. The decrease mostly reflected ample supply as well as demand concerns as global growth appears to decelerate.”
Wow – this is the kind of pre-K reading Bruce Hall excels at. Seriously – even a CoRev rant shows a deeper understanding of the actual economics. Demand! Supply? I once had a pet parrot that could do better than that.
I did learn from his link that coffee prices are going up. And they say I’m generally grumpy earlier in the morning. High coffee prices are going to make this worse!
Gee, pgl, I think you’ve been drinking way too much coffee. If you could calm down, you might be able to discern the real point: Also, the decrease in agricultural prices isn’t exactly a new phenomenon and actually look at the price history chart. If you want to disagree with that, I’m open to see your source of alternative data.
You might also note that this was in response to Figure 1 which lacked data prior to 2017 (in order to buttress the argument that Trump is at fault for declining agricultural prices). Perhaps you don’t like data starting in 2013. You’re welcome to provide data from an earlier date.
Your snarky comments? Meh.
“you might be able to discern the real point”.
No I get perfectly your real point. You cherry picked dates to dishonestly claim Obama screwed farmers. Actually the real point is that you want a job with Team Trump. So you lie for them. Good little boy Brucie!
Menzie, I’m not sure. Who do we have to thank for that? https://fred.stlouisfed.org/series/DTWEXM/
We’re counting on you, and Kellyanne Conway, to keep us straight Bruce. Do you know if the southern border wall is finished yet?? And Bruce, can you update on the denuclearization in North Korea?? How’s the American coal industry circa 2019 Bruce??
Bruce can you show me the check Mexico wrote for the wall?? Where’s the carbon copy of the check from Mexico Bruce??
https://www.youtube.com/watch?v=R90ZEAcr5ro
https://www.youtube.com/watch?v=rCyD2a46rNk
https://www.youtube.com/watch?v=Nf_CATbYilQ
Don’t blame what BLS says about the unemployment rate? Oh that is when Obama was President. Now that Trump is President, believe whatever stat he can cherry pick from the BLS! No wonder Brucie boy likes this clown!
Moses, eh? Did you have too much coffee, too? I’m going to take my extra after-tax dollars and enjoy the lake today. Have a nice 4th.
@ Bruce Hall
It’s good you answered a question I never asked you about your free time Bruce, because you sure as F*ck didn’t have any answer for any of the 4 questions I actually asked about your racist idol in life.
“Who do we have to thank for that?”
For what Brucie boy? You forgot to tell us. Come on Brucie – cherry pick a few dates for us to bash Obama and praise Trump. BTW – such excellent research skills finding a trade weighted nominal exchange rate. Of course any one with a brain would have chosen a real exchange rate series. And then told us what his “real point” was.
https://fred.stlouisfed.org/series/TWEXBPA
“resulting lost or delayed planting”. Which means an inward shift of the supply curve.
Hey Bruce – you must have learned economics from CoRev. He too thinks an inward shift of the supply curve drives down prices. Dude – we have gotten CoRev to start taking Econ 101. Do the same thing before writing such utter stupidity again!
pgl, delayed or lost planting affects earnings regardless of price. Eh? If you don’t grow it, they won’t come.
Paraphrasing Field of Dreams now? I guess Trump’s dumbest troll does not this movie was about baseball.
https://www.youtube.com/watch?v=o3c_pJ_CLJQ
“Also, the decrease in agricultural prices isn’t exactly a new phenomenon.”
Bruce Hall follows this with a source that pretends the history of prices began in 2013. Of course I early noted:
“Table 1.3.4. Price Indexes for Gross Value Added by Sector
I’m looking at the annual data going back to 2009 when it was 60.397. By 2013 it had risen to 102.670.”
Bruce Hall wins the award for most cherry picking dishonest analysis of the year! Well done Bruce!
I suppose trashing the economy in order to resurrect it right before an election is a clever strategy. If it works. The current administration doesn’t appear to be capable of that kind of thought. It’s also going to be interesting to see if rural, agricultural states turn against the administration in 2020 after the economic floggings they are taking.
Bill Nordhaus wrote a paper on this in the early 1970’s. I think he was thinking about how Nixon ran macroeconomic policy during his first term. Of course Trump may be trying to pull the same stunt but something tells me that the Idiot in Chief has the timing all wrong!
Completely wrong. He spent the first couple years of his administration pumping up an economy that didn’t need it. Unless my knuckle dragger instincts are way off this time, there’s going to be a noticeable slowdown about this time or maybe a little later next year. I don’t expect an economic abyss. That happens every 30 to 50 years. We aren’t due for one of those, no matter what happens. I expect flattening, which will seem like a recession to those who haven’t experienced one for the last decade. Meaning pretty much everyone.
So, bad timing. Bigly.
“He spent the first couple years of his administration pumping up an economy that didn’t need it.”
You are making my point about bad timing. The Nixon game plan – which the Nordhaus political business cycle model depicts – is to kill the economy and lower inflation (the 1969 Nixon recession) and then later pump it back up. Reagan in his own way did the same in his first term – well Volcker did that for him. Of course Reagan’s team with their “Morning in America” dishonest commercials blamed the 1981/82 recession in Jimmy Carter.
Trump on the other hand is pumping the economy early on risking a 2020 recession. Oh wait – he’ll somehow blame the 2020 recession on Obama! After all – it is Obama’s fault that he passed tax cuts for rich people and started that trade war!
Right before doesn’t work. The unemployment rate falls slowly, rises quickly. In order to win votes with the economy cycle, the recovery needs to happen early in a presidential term so that the jobless rate is low a few months ahead of the election. Reagan, Clinton and Obama all had this kind of luck. Carter and Poppy Bush did not.
Someone has read Nordhaus! Well said!
Interesting, but immaterial politically. Farmers, like most folk, simply aren’t rational agents.
There may not be rational agents in the John Muth/Robert Lucas sense but something tells me they are a lot smarter than CoRev, Bruce Hall, and Trump’s economic team!
Farmers have a much easier time knowing why their income is doing what it’s doing than do wager earners. The “complete information” assumption is closer to true for farmers than for school teachers, plumbers, accountants… So it’s easier for farmers to approximate rationality in the narrow world of economic policy than for the median voter.
Separately, the word “immaterial” is an absolute. Absolute statements are always wrong.
Well said again! You’re on a roll today!!!
immaterial as an alternate choice for irrelevant.
I stand on my literary rights…
@ Secondlook
I think you’re missing the point. The fact that farmers aren’t rational when they go vote makes it all the MORE material politically. They are voting for policies damaging both to themselves and to other Americans without it even registering cognitively. That’s an extremely extremely dangerous situation. That’s when you get stuff like what is happening in Italy right now. It snowballs. We’re up to about basketball sized snowball right now. If we get past November 2020 and the Orange Menace is still running the show you’re looking at a 50 meter by 50 meter snowball with a boulder rock at the core.
https://www.youtube.com/watch?v=mzHAHaoQz28
Some of CoRev and Bruce Hall’s best friends there. Ed Hanson may be hiding in one of those pickup truck beds.
My point, if you’ll allow a turn of phrase, is that people can be rational on many levels and still rationalize bad decisions.
There is a body of evidence that we may be wired for that.
To borrow a descriptive clip:
Brain MRI scans show that when we’re confronted with dissonant information and use rationalization to compensate, the reasoning areas of our brains essentially shut down while the emotion circuits of the brain light up with activity. In other words, emotions trump logic. Researchers have also concluded by this information that once our minds are made up, it’s hard to change them; even reading information that goes against our initial point of view only adds to the justifying that we were right.
You have just explained all those rants from CoRev, JBH, Bruce Hall, and the rest of the Usual Suspects!
“The Trump Administration Is No Friend of the Farmer”
If Trump actually succeeded in bringing back U.S. manufacturing that was lost after trade was normalized with China, one would naturally expect agriculture to suffer, at least relative to manufacturing, right?
Well that was the Republican tariff policy right after the Civil War. Boost Northern farming and basically screw Southern farmers. Now in Trump world, both manufacturing and farming have suffered from his trade war. Heck of a job Donald!
“at least relative to manufacturing”. Not relative about this. Farm income has declined in absolute terms. Can I remind you of my earlier comment?!
‘Table 1.3.6. Real Gross Value Added by Sector, Chained Dollars
Real gross value added for the farming sector (2012$) was around $200 billion in 2016 but has dropped to $182.5 billion by 2019QI. So in terms of income (not prices) we have a 9% reduction under Trump. Under the Obama years, this series consistently increased.’
Come on folks – facts over spin please!
@ Menzie
Menzie, I’ve always said you were a sharp cookie. Being one of those damned derned Puh-hud guys and all…….. Have you ever tried to register yourself as 3 different entities at the same exact address?? I heard it 3rd hand it pays quite well. You might try telling some European Uni that you’re a visiting scholar at that you’re actually 3 different professors living in the same off-campus apartment. Try the aliases Stephen Moore and Scott Sumner, cash those salary checks real fast and when they start poking around asking questions you say “You know, I always thought those two were a little screwy in the head”
https://apnews.com/75df5e7bf56e43df99d091bc4d16a87d