http://www.card.iastate.edu/iowa_ag_review/ The latest Iowa Ag Review articles from the Center for Agricultural and Rural Development (CARD) en-us Copyright 2006, Center for Agricultural and Rural Development http://backend.userland.com/rss sclarke@iastate.edu (Sandra Clarke) curtb@iastate.edu (Curtis Balmer) http://www.card.iastate.edu/xml/rss.jpg http://www.card.iastate.edu/ 118 62 http://www.card.iastate.edu/iowa_ag_review/fall_09/article1.aspx At a time when the federal budget is under intense scrutiny for any excesses, the Risk Management Agency of USDA released the results of a commissioned study on U.S. crop insurance profitability in its sales of multi-peril crop insurance. The report concluded that the industry has received a 19 percent return, when a reasonable rate of return would have been 11 percent over the study period. The insurance industry responded with its own study, citing reasonable returns considering the greater risk entailed. As Congress considers the issue, with these competing studies vying for the last word, the tools of economics can help demonstrate whether the industry is over- or undercompensated, and whether taxpayer funding could be cut without harming the industry. Mon, 02 Nov 2009 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/fall_09/article2.aspx The Risk Management Agency uses past loss-cost ratios to determine the extent of yield risk in setting today's premiums in U.S. crop insurance programs. In other words, the assumption is that the amount of yield risk in the past is the same as the amount of yield risk today. The trouble is, mounting research suggests that crop risks are getting lower because of biotechnology. Mon, 02 Nov 2009 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/fall_09/article3.aspx After 15 years of publication, the Iowa Ag Review goes to press and post for the last time with this issue. In its place, a new series of CARD Policy Briefs on timely topics will appear in 2010. Mon, 02 Nov 2009 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/summer_09/article1.aspx Passage in the U.S. House of a climate bill galvanized attention to the repercusions of climate legislation on agriculture. The time frame for Senate movement on a climate bill has been pushed back to September 28, underscoring the difficulty of crafting such a policy. Without details of the legislation, it is difficult to pinpoint all of the winners and losers under the present bill, but some general estimates of the increased costs of production on the farm and new benefits gained through carbon trading can be deduced. Wed, 15 Jul 2009 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/summer_09/article2.aspx Since the U.S. Environmental Protection Agency released its analysis of greenhouse gas emissions from biofuels, there has been great scrutiny of the inclusion and calculation of land-use changes in other countries from U.S. biofuels policy. Just how these land-use changes are measured, the models and data used, and the role of agricultural economists are covered in this overview. Wed, 15 Jul 2009 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/summer_09/article3.aspx So far, the new Average Crop Revenue Election (ACRE) program has had a pretty slow start, with low numbers signing up in most states, including Iowa. However, the recent sharp drop in commodity prices may have farmers taking a closer look at the program, which has an August 14 deadline for enrollment. This spotlight presents the latest calculations of the odds of ACRE payments--including the average size of a payment--for Iowa corn and soybeans farmers who elect to enroll and whether the gains under the program are expected to outweigh the losses in direct payments. Wed, 15 Jul 2009 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/spring_08/article1.aspx As the U.S. House of Representatives and Senate work toward a compromise to pass a new farm bill, payments to crop insurance to support the farm sector are again in the crosshairs. Taxpayers have spent more than $22 billion since 2000 delivering about $11 billion in net payments to farmers through the crop insurance industry. Much of the gains in underwriting for insurance companies comes from Corn Belt farmers, and that may be one reason why is has proven so difficult for Congress to make reforms: industry profits generated in the Corn Belt allow farmers in other regions to pay lower insurance premiums. Mon, 14 Apr 2008 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/spring_08/article2.aspx Without knowing the 2008 corn yield, growing conditions, and demand from the ethanol industry, among other important variables, the outlook for 2008 corn prices is difficult to forecast, even for traders at the Chicago Board of Trade. But add into this mix the chance for a major drought and/or a relaxation of ethanol mandates by Congress, and knowing where prices are headed becomes a truly complex problem, one that researchers at CARD are trying to solve using a detailed computer model of the corn market. Mon, 14 Apr 2008 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/spring_08/article3.aspx With crop prices at record highs and demand pressures from livestock producers, consumers worldwide, and the biofuels industry continuing to build, attention has turned to the land held in the U.S. Conservation Reserve Program (CRP). While CRP acreage could be used to expand aggregate supply, the program also provides environmental benefits and protects environmentally sensitive lands. Here, we look at current CRP policy and potential changes that could address current production needs in a way that upholds conservation priorities. Mon, 14 Apr 2008 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/spring_08/article4.aspx The U.S. dollar has been weak against the currencies of many of the country's trade partners and trade competitors for quite some time. And this helps explain why record corn exports are projected for 2007-08 despite record high corn prices in the United States. Mon, 14 Apr 2008 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/spring_08/article5.aspx For corn, soybeans, wheat, and cotton, three line graphs of the "total crop industry revenue," "policies serviced and associated total agent commissions," and "agent commission per policy sold" from 2000 through 2007 tell the story of an insurance industry that is benefiting greatly from higher crop prices. Mon, 14 Apr 2008 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/winter_08/article1.aspx Current high commodity prices seem to be defying the principal laws of market economics. Biofuels mandates may be creating an unprecedented era. But what about after the ethanol mandate is met? A few supply and demand scenarios that take into account key variables in ethanol markets and policy as well as crude oil prices illustrate some possibilities for prices once the target 15 billion gallons of ethanol has been reached. Fri, 25 Jan 2008 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/winter_08/article2.aspx Ethanol production has shifted into high gear to meet a new mandate, and surpluses of dried distillers grains, a by-product, will accompany that production. Author Roxanne Clemens summarizes the latest information on nutrient content and optimal inclusion rates of distillers grains for use as a feedstock for beef cattle. Fri, 25 Jan 2008 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/winter_08/article3.aspx The U.S. Energy Independence and Security Act mandates enormous growth in the use of biodiesel -- from 500 million gallons in 2009 to one billion gallons in 2012. But will the biodiesel industry capture the spoils? Fri, 25 Jan 2008 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/winter_08/article4.aspx Since the passage of the 2007 energy act, which set a higher renewable fuels standard, the prospects for ethanol look bright, and corn prices remain on an upward trajectory. How might energy and agricultural sector developments affect these markets, including corn exports, over the next few years? Fri, 25 Jan 2008 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/fall_07/article1.aspx Whether corn ethanol can be considered a low-carbon fuel has been a question of much speculation and the object of quite a few studies. The studies present different answers, however, because they use different assumptions or frame the question in different ways. Here, we explain the process researchers follow to calculate greenhouse gas emissions and share the results of a new CARD life cycle analysis for Iowa corn that takes land use changes into consideration, both in the U.S. and abroad. Tue, 30 Oct 2007 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/fall_07/article2.aspx As Congress searches for ways to fund changes in the farm bill, only two potential sources hold any promise for cost savings: direct payments and crop insurance. The House-passed farm bill kept direct payments in place but reduced crop insurance. The Senate seems poised to pass a similar measure. What exactly are U.S. taxpayers, farmers, and the crop insurance industry getting in return for their stakes in the program, and what will be the consequences if Congress makes some cuts? Tue, 30 Oct 2007 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/fall_07/article3.aspx Though the recent trend of falling prices for ethanol has definitely tightened margins at ethanol plants, the price drop has created new opportunities for growth through blending in conventional fuels. Author Chad Hart explores the price incentives and the regions with plenty of potential left to tap. Tue, 30 Oct 2007 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/fall_07/article4.aspx The falling value of the U.S. dollar is making headlines. Does a weak dollar help to explain rising commodity prices? An important measure of that influence is found by looking at the value of the U.S. dollar against the currencies of trade competitors and buyers of U.S. exports. Tue, 30 Oct 2007 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/summer_07/article1.aspx This year, Congress is considering what to do about farm policy while trying to work within pay-as-you-go budget rules. They are also contemplating fuel mandates that would greatly increase ethanol production. But though the two policies are intertwined, there seems to be little thought to the effects of the biofuels mandates, or high commodity prices that traders say may be with us for awhile. Wed, 25 Jul 2007 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/summer_07/article2.aspx Consumers may be feeling a pinch in their wallets at the supermarket checkout counter, as some food prices seem to be climbing. Ethanol is sometimes cast as the villain in this story, since high demand for biofuels has raised the price of corn and other grains. But U.S. shoppers might be surprised to learn how little the higher price of corn raises the cost of their groceries. Wed, 25 Jul 2007 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/summer_07/article3.aspx CARD begins a year-long celebration of its 50 years of service as a university-based public policy research center focused on agriculture. Wed, 25 Jul 2007 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/summer_07/article4.aspx The great demand for corn from an expanding ethanol industry has had tremendous effects on corn prices and planted acreage across the Midwest. In Iowa, it has also shifted the pattern of corn prices across the state. We examine how basis levels -- the difference between the prices listed on the Chicago Board of Trade futures for corn and prices being paid in Iowa -- have changed across the state and where these patterns might be headed. Wed, 25 Jul 2007 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/spring_07/article1.aspx USDA's Prospective Plantings Report predicts that farmers will plant 15 percent more corn acreage this season to meet growing demand from ethanol. Booming production of corn may moderate prices, at least this season, but livestock producers may face tight margins, and continuing higher costs may lead to a smaller livestock industry. This and other ripple effects, including higher land rents, higher food costs, and environmental effects, from the fast-growing ethanol industry have led to questions about what U.S. biofuels policies are trying to accomplish and whether those aims are worth the trade-offs. Tue, 01 May 2007 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/spring_07/article2.aspx The Conservation Reserve Program was created to move some of the nation's most fragile lands out of crop production to improve the environmental quality of those lands. Iowa has a large number of acres enrolled in the CRP. It also produces the most corn in the nation--and the most ethanol. How will the expansion of the ethanol industry affect the enrollment of Iowa's CRP acres and Iowa's environmental quality? Tue, 01 May 2007 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/spring_07/article3.aspx The returns to crop production are increasing, and those returns will also make their way into the value of Iowa farmland. These potential changes, their main beneficiaries, and their ultimate impacts for Iowa are outlined. Tue, 01 May 2007 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/spring_07/article4.aspx The United States has increased its production of biodiesel from 2 million gallons in 2000 to 250 million gallons in 2006. Governmental incentives are fueling the increase, along with rapidly increasing demand. But margins for the industry are tight, given the price of feedstocks, which is mostly soybean oil in the United States. What is the viability of U.S. biodiesel in the near term? Tue, 01 May 2007 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/spring_07/article5.aspx When demand for corn is as high as it is today, weather takes center stage in discussions about meeting expectations for production. Many remember the large shortfall in corn production in 1988--a hot, dry growing season. And the drought of 1983 caused the second-largest shortfall since 1970. Looking at historical production patterns, we can calculate the probability of meeting, exceeding, or falling short of harvest expectations. Are the odds in our favor for 2007? Tue, 01 May 2007 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/winter_07/article1.aspx As Congress prepares for 2007 farm bill debate, the new chair of the House Committee on Agriculture has suggested that a standing disaster payment program should be a permanent part of the farm bill. But since such a disaster relief program would duplicate coverage offered through crop insurance, the proposal calls into question whether the goals of the crop insurance program remain unmet, and whether a more effective mix of commodity programs and disaster coverage could be found. Thu, 01 Feb 2007 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/winter_07/article2.aspx Some dramatic shifts are underway in Chinese consumers' food preferences. In a market that used to be limited by consumers' low incomes and tastes for locally produced foods, structural changes in China have paved the way for other product attributes to become more prominent in consumers' consumption decisions, and this could be welcome news for U.S. food industries. Thu, 01 Feb 2007 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/winter_07/article3.aspx As more and more ethanol plants come online, operators are looking for a competitive edge. A few ethanol plants have found a way to increase their revenues by locating near livestock operations, thus taking advantage of feeding by-product distillers grains to cattle and using the manure as an energy source. Just how much of an advantage might such a plant have compared to a plant located near corn but not near livestock? Thu, 01 Feb 2007 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/winter_07/article4.aspx There is no doubt that ethanol expansion will change the flow of corn across the United States. Here, we estimate state-level domestic surplus corn--the amount remaining in a state after ethanol, livestock, and other processing is considered--to see how surplus corn might change in midwestern states by 2008. Thu, 01 Feb 2007 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/winter_07/article5.aspx Even though the United States currently produces vast quantities of the age and type of beef demanded by the Japanese market, Japanese importers have been unable to source enough eligible U.S. beef since the ban was lifted. With both trade partners willing and demand growing, why isn't the U.S. industry better able to meet beef demand in Japan? Thu, 01 Feb 2007 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/fall_06/article1.aspx The 2002 farm program was designed to protect farmers from low commodity prices. Now, as Congress reviews the current set of programs in preparation for decisions in 2007, we are entering a period of high prices. How has Congress reacted in the past to periods of high prices, what have been the consequences of those choices, and how efficient are the options they will consider for the next farm bill? Mon, 30 Oct 2006 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/fall_06/article2.aspx USDA has projected a scenario in which by the year 2010, U.S. ethanol, livestock, and exports could reach a combined demand of 90 million acres of corn. The United States has not planted that much corn acreage since 1944. Land use in the Southeast, where signficiant corn acreage came from in the 1930s and 1940s, has changed and moved out of production. And the amount of acreage scheduled to be released from the Conservation Reserve Program between 2007 and 2008 is less than originally projected, with most of that land more suitable to wheat rather than to corn production. Mon, 30 Oct 2006 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/fall_06/article3.aspx As outlined in the Agricultural Situation Spotlight, demand for corn acreage is expected to intensify, and the Corn Belt will be the focus for much of this demand. Analysts have predicted that this corn acreage will come at the expense of soybean acreage. Changing rotation away from the usual corn-soybean pattern comes at a cost. Researchers have investigated the costs of changing rotations, how high corn prices would have to be for producers to make this switch, and how yields figure into the equation. Mon, 30 Oct 2006 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/fall_06/article4.aspx For the past decade, exports of U.S. pork have grown substantially. And while three countries (Japan, Mexico, and Canada) are responsible for most of the growth in U.S. product being shipped, other smaller markets have made a big contribution to the success of U.S. pork abroad as a result of trade agreements and strong demand. Mon, 30 Oct 2006 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/fall_06/article5.aspx The 2002 farm legislation contained much more funding for conservation programs than in years past. Now, with budgets under increasing scrutiny, policymakers want more evidence that the funded programs are producing results. Researchers at CARD and in other departments at Iowa State University are working on several studies to determine what impacts various conservation programs are having on Iowa's cropland and its watersheds. Mon, 30 Oct 2006 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/summer_06/article1.aspx The current crop insurance program is complex, and so it is difficult to evaluate whether crop insurance funds are being used efficiently. We do know, though, that it has cost taxpayers $15.1 billion to deliver $8.82 billion to farmers since 2001, when the Agricultural Risk Protection Act went into effect. A better understanding of the program, its original objectives, subsequent reforms, and current public-private partnership might help determine whether the benefits of the program are worth the costs. Fri, 21 Jul 2006 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/summer_06/article2.aspx Current proposals in the Doha Round of the World Trade Organization would bring about major changes in international dairy markets. Lower tariffs and removal of subsidized products would create notable shortages. Countries with strong dairy industries would certainly respond to the demand. Two countries with great potential for capitalizing on the market opportunity are Argentina and Chile. A recent CARD study looked at strengths and challenges for these two countries' dairy sectors. The U.S. dairy sector can draw lessons from the findings. Fri, 21 Jul 2006 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/summer_06/article3.aspx Weather events and crop prices created a gap between planting intentions and actual planted acreage in 2006. In spite of adequate to high crop stocks, prices remain strong. Demand from the livestock sector and the ethanol boom have sent a strong signal to growers that the market wants commodities--especially corn. Fri, 21 Jul 2006 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/summer_06/article4.aspx As illustrated in this quarter's Agricultural Situation Spotlight, the next five years will see a significant increase in U.S. acreage planted to corn, at the expense of soybean acreage. The market will have to look for substitutes for U.S. soybeans. South America plays a key role in providing soybeans and other oilseeds for the world market. Can South American production meet this projected increase in demand? Fri, 21 Jul 2006 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/summer_06/article5.aspx The boom in biofuels production has set in motion changes that will have profound effects on U.S. agriculture, in both the crop and livestock sectors. Increasingly, CARD researchers are being asked to supply answers to the many questions about the impacts of biofuels. That is why CARD has a new research division called Biorenewables Policy. Fri, 21 Jul 2006 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/spring_06/article1.aspx Do U.S. farm programs lead to cheap food? Some U.S. producers think so. They say that farm program payments are justified because they keep food affordable for consumers. But Canadian corn farmers think so, too. They claimed that U.S. corn prices are kept artificially low through U.S. subsidies (though they recently lost a decision on that claim in a case before the Canadian International Trade Tribunal). How can we determine if there is a connection between farm program payments, commodity prices, and food prices? Thu, 20 Apr 2006 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/spring_06/article2.aspx The use of U.S. corn for fuel is definitely on the upswing. Projected increases in ethanol production suggest that fuel use of U.S. corn will soon surpass corn exports. And while this would seem to be a win-win situation for corn producers, with the savings in transportation costs and surefire market for the commodity, at least two complications arise from this reliance on ethanol for corn growers. One is the resulting distillers grains that must be marketed. The other is the unforeseen impact on the price. Thu, 20 Apr 2006 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/spring_06/article3.aspx As the United States ramps up to meet the demand for ethanol production, it might be instructive to look at the policies and marketings of the largest producer of ethanol, and the country that currently provides the most U.S. imports--Brazil. Thu, 20 Apr 2006 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/spring_06/article4.aspx A large amount of land enrolled in the Conservation Reserve Program will begin to be released from the program in 2007. In Iowa, over 500,000 acres are set to be released. Other CRP acres with contracts expiring are located in major production regions for wheat, corn, soybeans, and cotton. Strong crop prices for these commodities could bring significant acreage back into production and have a tremendous impact on production and prices. Thu, 20 Apr 2006 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/spring_06/article5.aspx Rising incomes and increased urbanization have created more demand in Mexico for higher-quality pork and stricter sanitary practices in its production and processing. In response, Mexico's pork industry has become more integrated and achieved greater production efficiencies. But even with these improvements, Mexico's pork industry has not kept up with the rising domestic demand, and Mexico has become an increasingly important market for the United States. A key to the development of increased trade is the growth in Mexico of federally inspected or "Tipo Inspección Federal" (TIF) plants and increased supermarket sales. Thu, 20 Apr 2006 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/winter_06/article1.aspx If a level playing field for world trade in agricultural commodities were created today, there would be some U.S. producer groups that would win and some that would lose when it comes to prices, production, and net exports. Those on the short end of the stick might like to see U.S. government control of agriculture increase instead of decrease. But examples of agricultural policies in other countries, such as Argentina, point to problems with this kind of governmental intervention. Wed, 25 Jan 2006 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/winter_06/article2.aspx Group Risk Income Protection (GRIP) coverage has been greatly expanded for 2006, with coverage now offered for corn, soybeans, grain sorghum, wheat, and cotton in most major growing regions. How does GRIP work, how does it compare with other crop insurance products, and who could most benefit by using this risk management tool? Wed, 25 Jan 2006 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/winter_06/article3.aspx The Office of the U.S. Trade Representative submitted a proposal to the World Trade Organization in October 2005 that was meant to jumpstart trade negotiations in agriculture in the days leading up to the December ministerial meeting in Hong Kong. The Food and Agricultural Policy Research Institute analyzed the proposal and reports what the consequences would be for the United States, its trade partners, and major commodities if it were adopted. Wed, 25 Jan 2006 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/winter_06/article4.aspx U.S. net farm incomes in 2004 and 2005 reached the two highest levels on record, and in Iowa the trends for income are just as pronounced. Meanwhile, with lower prices, government support to agriculture is also high. The ratio of government support to the value of production for Iowa corn shows a steap rise from 2002 to 2005. A comparison of the composition of total value of Iowa corn for the 2002 and 2004 crop years shows the interaction of crop prices, values, and government payments. Wed, 25 Jan 2006 12:00:00 CST http://www.card.iastate.edu/iowa_ag_review/winter_06/article5.aspx Foodborne illness in the human food chain costs society nearly $6.9 billion per year, according to recent estimates. University and industry partners in the Food Safety Research Consortium have studied how policymakers can make the best use of food safety resources to find cost-effective solutions to this complex problem. Wed, 25 Jan 2006 12:00:00 CST