Evening Report | February 13, 2024

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USDA releases 2022 Census of Agriculture data... Ag census data provide valuable insights into demographics, economics, land use and activities on U.S. farms and ranches. Highlights:

• There were 1.9 million farms and ranches (down 7% from 2017) with an average size of 463 acres (up 5%) on 880 million acres of farmland (down 2%). That is 39% of all U.S. land.
• Family-owned and operated farms accounted for 95% of all U.S. farms and operated 84% of land in farms.
• U.S. farms and ranches produced $543 billion in agricultural products, up from $389 billion in 2017. With farm production expenses of $424 billion, U.S. farms had net cash income of $152 billion. Average farm income rose to $79,790. A total of 43% of farms had positive net cash farm income in 2022.
• Farms with internet access continued to rise from 75% in 2017 to 79% in 2022.
• A total of 153,101 farms and ranches used renewable energy producing systems compared to 133,176 farms in 2017, a 15% increase. The majority of farms (76%) with renewable energy systems reported using solar panels.
• In 2022, 116,617 farms sold directly to consumers, with sales of $3.3 billion. Value of sales increased 16% from 2017.
• The 105,384 farms with sales of $1 million or more were 6% of U.S. farms and 31% of farmland; they sold more than three-fourths of all agricultural products. The 1.4 million farms with sales of $50,000 or less accounted for 74% of farms, 25% of farmland, and 2% of sales.
• Nearly three-fourths of farmland was used by farms specializing in two commodity categories: oilseed and grain production (32%) and beef cattle production (40%).
• The average age of all producers was 58.1, up 0.6 years from 2017. This is a smaller increase than the average age increases between prior censuses.
• There were just over 1 million farmers with 10 or fewer years of experience, an 11% increase in the number of beginning farmers from 2017. Beginning farmers are younger than all farmers, with an average age of 47.1.
• The number of producers under age 35 was 296,480, comprising 9% of all producers. The 221,233 farms with young producers making decisions tend to be larger than average in both acres and sales.
• In 2022, 1.2 million female producers accounted for 36% of all producers. Fifty-eight percent of all farms had at least one female decision maker.

Click here to view the full Census of Agriculture report.

U.S. consumer inflation slows less than expected... The annual inflation rate in the U.S. fell to 3.1% in January following a 3.4% increase in December but came higher than forecasts of 2.9%. Compared to the previous month, the consumer price index (CPI) edged up 0.3%, the most in four months, and above forecasts of 0.2%.

Annual core inflation, minus food and energy prices, held at 3.9%, compared to expectations it would slow to 3.7%. The monthly core CPI rate rose 0.4%.

The food price index rose 0.4% on a monthly basis and 2.6% annually in January. Food at home (grocery store) prices increased 0.4% last month, while food away from home (restaurant) prices rose 0.5%. On an annualized basis, grocery prices increased 1.2%, while restaurant prices jumped 5.1%.

The energy index fell 0.9% in January, with gasoline down 3.3%. The annual energy index dropped 4.6%, with gasoline prices down 6.4% from year-ago.

Following the stronger-than-expected inflation data, traders increased odds the Fed will wait until June before cutting interest rates.

CBO: Crop insurance costs to surge 29% over next decade... The Congressional Budget Office (CBO) projects federally subsidized crop insurance will cost an additional $27.7 billion over the next decade, with the government covering roughly 62% of premiums. Crop insurance costs are estimated to rise by 29% to nearly $125 billion for the decade ending in 2033. Despite this increase, USDA spending on crop and livestock subsidies and land stewardship programs is expected to remain stable.

Livestock insurance has seen significant growth since 2018 due to increased premium subsidy rates, covering $26.4 billion in liabilities in 2023. The popularity of forage policies is expanding the reach of the crop insurance program. With over 539 million acres enrolled, crop insurance enjoys strong support from farm-state lawmakers.

Emails reveal left-wing influence on Biden trade policy... The Biden administration’s trade policy is under scrutiny due to emails revealing how Federal Trade Commission Chair Lina Khan and left-wing groups influenced U.S. Trade Representative Katherine Tai, the Wall Street Journal (WSJ) noted in a commentary item. Tai outlined the administration’s new anti-trade agenda, criticizing previous administrations’ efforts to promote trade policies benefiting businesses and consumers. Tai withdrew support for digital trade principles at the World Trade Organization and in negotiations for the Indo-Pacific Economic Framework trade deal, citing the need for domestic tech regulation debates. Left-wing groups like Rethink Trade influenced this decision, advocating for policies that prioritize domestic policy space over international trade agreements. The WSJ item says these actions, criticized by business groups like the U.S. Chamber of Commerce, undermine efforts to protect intellectual property and promote digital trade, benefiting various industries.

Bottom line: The involvement of Khan and her associates raises concerns about the influence of anti-trade agendas on U.S. trade policy and its implications for global trade relationships.

WTO deputy chief optimistic ahead of MC13... World Trade Organization (WTO) Deputy Director-General Angela Ellard discussed the state of reform talks ahead of the 13th Ministerial Conference (MC13). She remains hopeful for the restoration of the full WTO dispute settlement system in 2024. While prospects for agricultural reform at the ministerial are modest, Ellard believes the gathering can help define a path forward on currently intractable issues. Implementation of the fisheries agreement is also highlighted, with initial funding to assist developing members meet new commitments under the accord. Ellard emphasized the importance of addressing various reforms across WTO functions and acknowledges differing views among members, particularly regarding public stockholding for food security. Despite the challenges, Ellard sees MC13 as an opportunity to achieve progress and set a roadmap for the future. Additionally, efforts are underway to support developing countries in implementing the fisheries agreement through a trust fund established by WTO members.

Ellard said members must decide whether to retain the two-tiered structure with dispute panels and an appeals body, or something different. “That is an issue they are they are still working on,” she remarked. Broader WTO reforms are also on the table, Ellard said, noting that some could be handled rather quickly while others may need a longer timeline to accomplish. As has been the case for years, public stockholding remains one of the main unresolved issues as MC13 approaches, Ellard said, adding that it may well be that countries cannot reach a permanent resolution.

“There’s a healthy debate right now about whether agriculture negotiations should be to cover all of these issues, or whether they should focus on just a few issues — and whether and to what extent food security should be to be the focus,” she said.

OPEC maintains optimistic outlook for global oil demand... OPEC is maintaining its optimistic outlook on global oil demand for 2024 and 2025, projecting growth of 2.25 million barrels per day (bpd) and 1.85 million bpd, respectively. The group also raised its economic growth forecasts for these years, anticipating a positive trend that could further boost oil demand. OPEC’s long-term outlook to 2045 sees no peak in demand.

OPEC and its allies have implemented output reductions since late 2022 to stabilize the market, with a new cut for the first quarter of this year already in effect. OPEC’s report also noted a decrease in OPEC oil production by 350,000 bpd in January due to voluntary output cuts by the OPEC+ alliance.