February 2018
Ag Insight

Ag Insight

Alabama Producer Named to Sorghum Board

An Alabama producer has been named by U.S. Secretary of Agriculture Sonny Perdue to serve on the United Sorghum Checkoff Program Board.

Appointed to serve a three-year term was Carlton Bridgeforth of Decatur.

The United Sorghum Checkoff Program Board is comprised of 13 U.S. sorghum farmers and authorized by the Commodity Promotion, Research and Information Act of 1996.

Since 1966, Congress has authorized the establishment of 22 industry-funded research and promotion boards. They enable farmers and ranchers to leverage their own resources to develop new markets, strengthen existing markets, and conduct important research and promotion activities.

The U.S. Department of Agriculture’s Agricultural Marketing Service provides oversight, paid for by industry assessments, ensuring fiscal accountability and program integrity for participating stakeholders.


U.S. Ag Trade 2018 Forecast Similar to 2017

The 2018 fiscal year will look similar to 2017, but with a slightly higher trade balance (exports minus imports) because of lower imports, according to the latest USDA trade forecast.

Total agricultural exports are expected to value $140 billion along with $117 billion in imports. Taken together, the trade balance would reach a surplus of $23 billion compared with 2017, when the balance was near $22 billion.

Both years mark a slight improvement over 2016 when exports and imports both fell, leaving a surplus of just $17 billion.

Before 2015, the United States had a consistently higher trade balance, driven by lower total imports. This is largely due to appreciation of the U.S. dollar as the country’s economy recovered from the Great Recession.

The 2018 forecast is driven by expectations of high demand for U.S. exports of corn and soybeans and their products.


Record Peanut Production Predicted

Peanuts are expected to be especially plentiful in the 2017/18 marketing year as record acreage of planted peanuts and high yields per acre are on track to produce the largest peanut harvest of all time.

If realized, the 7.6 billion pounds of peanuts predicted will exceed the previous record of 6.7 billion pounds in 2012.

The 2017 forecast calls for a significant change from 2016 with 37 percent more peanuts produced. The projected growth is due to a 15-percent increase in yield per acre and a 19-percent increase in acreage harvested.

The record production will likely mean a significant increase in peanut exports that had already doubled since 2011.

At state levels, record-high yields are forecast in Georgia, Mississippi and South Carolina, with production in Georgia and South Carolina expected to be the highest on record.

Georgia is the largest producer of peanuts in the nation and responsible for growing roughly 50 percent of all the country’s peanuts.


U.S. Land Use Shows Marked Changes

While the adage is true about no one making any more land, it’s also true there have been changes in how some 2.3 billion acres in the nation are used.

Land used in agriculture has become less common over time, declining from 63 percent in 1949 to 52 percent, according to the latest data available. Gradual declines have occurred in cropland, while grazed forestland has decreased more rapidly.

Latest figures show 392 million acres of agricultural land were in cropland (18 percent less than in 1949), 655 million acres were in pasture and range (4 percent more), 130 million acres were in grazed forestland (59 percent less), and 8 million acres were in farmsteads and farm roads (45 percent less).

In contrast, land used for rural parks and wilderness (included in nonagricultural special uses) has increased by 226 million acres since 1949, contributing to the relative growth in nonagricultural land use over time.

Urban land, representing a relatively small share of the U.S. land base, has nearly tripled in area since 1949 to accommodate economic and population growth.


USDA IT Model to Be Revamped

USDA has announced it will revamp its information technology operating model to increase efficiency in serving its customers.

USDA officials are convinced the ability to effectively manage and modernize IT systems will be a key factor in achieving a more customer-focused organization. The goal is to enable informed decision-making and improve the experiences customers have when interacting with USDA, whether they are working with the agency online or sitting across the table.

USDA touches American citizens daily through its work with America’s farmers, ranchers, national forest users, rural communities, consumers, trade partners, agricultural industry, scientific researchers and the public.

The agency will work with the White House Office of American Innovation to execute a series of key strategies, including:

  • Having a single chief information officer, along with one assistant CIO for each mission area, who will focus on improving IT for the specific services and programs. This will reduce the number of CIOs from 22 to one, with seven assistant CIOs.

  • Consolidating end-user services and data centers from 39 to a single data center and a backup. This move will provide a cost-effective, high-quality, departmentwide helpdesk and reduce cybersecurity vulnerabilities.

  • Enabling a strategic approach to data management and introduce data-driven capabilities by implementing executive dashboard solutions with USDAwide data.

  • Improving the USDA customer’s experience by delivering all new Farm Bill programs online and creating online service portals that are easy-to-use, include additional self-service capabilities and integrate data for common customers.


Household Spending on All Food Shows Slight Increase

The average American household spent a slightly larger percentage of its income on total food – grocery and restaurant purchases – in 2016 than in 2015.

The increase from 12.5 percent of expenditures in 2015 to 12.6 percent in 2016 possibly reflects 2016’s 0.3-percent rise in total food prices, combined with the 2.1-percent decline in transportation costs.

With a 12.6-percent share, food ranked third behind housing (33 percent) and transportation (15.8 percent) in a typical American household’s 2016 expenditures.

Breaking down food spending further, 7.1 percent of expenditures were spent at the grocery store and 5.5 percent at restaurants.

Looking at expenditure shares over time, food’s share has steadily declined since 1984 (the first year of available data), when food expenditures accounted for 15 percent of consumer spending. As the share for food has declined, the shares of income spent on housing, health care and entertainment have increased.


A Closer Look at Global Ag Trade

Among the agricultural-product categories that make up the largest share of global-trade value, movement in average import shares has varied, with some products growing in significance and others declining.

Over the four five-year periods measured from 1995 to 2014, oilseed imports (bulk commodities) and their products (intermediate commodities) have had the fastest growth in share of total value.

In contrast, the share of trade for two bulk-product categories – grains and tropical commodities (coffee, sugar and cocoa) – declined during that period.

For consumer-oriented products, the share of animal products, fruits and nuts, and vegetables in global-agricultural trade declined slightly, while the share of processed food increased.

Fibers, particularly cotton and others used for clothing, witnessed the steepest loss in share of total agricultural-import value. Cotton consumption peaked in 2007.

China, the largest consumer of cotton fiber, reduced its imports beginning in 2012 to rely more on domestic production and carry-over stocks from previous years.

The growth in oilseed trade and their products has been one of the most significant developments in the global trade landscape, driven by growing imports from China and India and export growth from Southeast Asia and the Americas.