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Farm Horizons • April 3 , 2017 • Page 10
particularly if we get favorable growing conditions . On the other hand , the reduced 2017 acreage for corn and wheat could create some pricing opportunities in future months for the 2017 crop , especially if there are any production challenges .
Besides the monthly USDA Supply and Demand Reports , the next important USDA crop data will occur with the USDA “ Planting Intentions Report ” Friday , March 31 .
Farm income forecast
USDA is projecting the inflation-adjusted US farm income for 2017 to be at the lowest level since 2002 ; however , USDA also pointed out that overall farm debtto-asset ratios continue to remain at very low levels .
Most observers agreed that the overall financial health of US agriculture is in better shape than was projected at last year ’ s Ag Outlook Conference , but admitted that there still continues to be farm profitability concerns going forward .
There were some reports of farm operators being denied farm operating loans for the coming year ; however , this was not seen as a widespread concern .
Some experts feel the biggest concern with farm operating loans may be for the 2018 growing season , especially if crop prices stay relatively low , and crop yields in the Upper Midwest return closer to trend line yields , following the record corn and soybean yields in Minnesota , Iowa , and other states in both 2015 and 2016 .
Many farm operators have already reduced input costs and used up excess working capital to deal with tight crop production profit margins in recent years , so there may not be as much flexibility for adjustments for the 2018 crop year .
Economists at the USDA Forum expect farm land values in most major crop producing areas of the US to decline moderately in the next 12 months ; however , they do not anticipate a sharp collapse in land values , similar to the 1980s .
In addition to level of farm profitability , increases in interest rates by the Federal Reserve in the next couple of years is also likely to have a negative impact on land values .
Many ag lenders reported much tighter scrutiny by federal and state bank examiners on agriculture-related loans , which could make ag credit more difficult for farm operators facing financial challenges .
However , most ag lenders also indicated that to this point , the number of problem ag loans has been quite manageable . Most of the agriculture financial experts are expecting some tight margins and increasing farm financial challenges in the next couple of years ; however , none of the experts were predicting a repeat of the farm financial crisis of the 1980s . •
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