Tuesday’s election will bring a significant change to the leadership in Washington D.C., with Republicans taking over leadership of the Senate and former President Trump being re-elected President. As of late Wednesday evening, it appears Republicans will remain in control of the House of Representatives, albeit with a very small majority. Leadership elections over the next couple of months will determine if Chairman Thompson (PA) and Ranking Member Scott (GA) will continue to lead the House Committee on Agriculture. Of the 29 Republican members currently on the committee, only 10 were around to vote on the 2018 Farm Bill (green represents they voted for the 2018 Farm Bill). Eight of 25 Democrat members were around to vote on the 2018 Farm Bill. So, only 18 of 54 members of the committee were around to experience the process and vote for the last farm bill. Most of the current Republican and Democrat members were re-elected on Tuesday with the exceptions of Republican Marc Molinaro (NY) and Democrats Abigail Spanberger (VA) and Elissa Slotkin (MI) who both left to seek other offices.
There is more experience on the Senate Committee on Agriculture, Nutrition and Forestry as 8 of 12 Democrats and 8 of 11 Republicans were around to work on the 2018 Farm Bill, although Senator Grassley (IA) voted against the bill (indicated in red). After Tuesday’s election, it is presumed that Senator Boozman (AR) will become Chairman, and the Democrats will select a new ranking member as Chairwoman Stabenow is set to retire at the end of the year. In terms of departures, Senator Braun (IN) is leaving to become the Governor of Indiana, and Senator Brown (OH) was defeated.
What does this mean going forward for the next farm bill? While the House and Senate differ in terms of experience, there should be plenty of motivated and experienced leaders in both the House and Senate to push the farm bill through whether it be before the end of the year or shortly into next year. After all, the need for a better safety net is currently being felt across the entire country.
In its October World Agricultural Supply and Demand Estimates (WASDE) update, USDA forecasted a roughly 2% increase in total corn supply for the 2024/25 season, contrasting with last year’s levels, while demand is forecasted to hold steady. This supply growth and stable demand has led to a downward trend in corn prices, projected at $4.10 per bushel – a 10% decrease from last season.
On the supply side, a 29% rise in beginning stocks has boosted total supply availability by 400 million bushels over last year. Despite a 3.7% increase in yields, a 4.4% reduction in harvested acreage shaved overall production by 0.9%, leaving output 138 million bushels below last year’s total (Table 1). Recent USDA ratings show roughly two-thirds of the crop in good or excellent condition, suggesting strong yield potential. Dry weather across the Corn Belt created ideal harvest conditions, accelerating progress to 81% of the crop harvested in the top 18 corn-producing states by October 27 – well ahead of the five-year average of 64%.
On the demand front, feed and residual use for corn is projected to edge up by 0.2%, or 11 million bushels, compared to last season, as growth in the broiler and hog sectors offsets a decline in the cattle herd. While corn usage for ethanol may see a slight dip of 21 million bushels (-0.4%), corn exports are forecast to climb 1.4%, adding 33 million bushels over last year’s total. The export boost can be partially attributed to competitive U.S. prices and limited supplies from drought-affected South American countries, particularly Brazil. However, total corn demand is projected to remain largely unchanged from the 2023/24 crop season, as shown in Table 1.
With supply anticipated to surpass demand, the USDA projects ending corn stocks to climb by 239 million bushels, a 14% increase over last season (Table 1). The “Days of Use on Hand at the End of the Marketing Year” built from ending stock levels indicates how many days the remaining corn supplies would last, based on average daily consumption, assuming no additional supply. This metric has a strong inverse relationship with season-average farm prices (SAFP), as illustrated in Figure 1. Given this relationship, along with USDA projections, Figure 1 suggests prices will hover around $4.10 per bushel in the coming year.
Latent factors could shift these projections, with geopolitical tensions playing a key role. The outcome of the U.S. elections may spark trade tensions, potentially changing global commodity markets. Meanwhile, the ongoing conflicts in the Middle East and between Russia and Ukraine can impact fertilizer and grain prices. In South America, recent rainfall has improved growing conditions, but the onset of La Niña brings uncertainty. After months of bearish sentiment and a period of neutrality, non-commercial net long positions in corn have turned positive, signaling a shift; speculators now hold more long than short positions, betting on a price rise.
Figure 1. U.S. Corn Average Farm Price and Days of Use on Hand
Shell egg prices have proven highly variable in the last few years. Consumer demand for eggs can be equally erratic but predictably increases around Easter in the spring and then again around the fall/winter holidays. Prices typically go up in response to this higher demand. Beginning in early summer, 2024 prices rose above and remained higher than in 2023. They spiked again in August due to lower supply caused by laying hen losses earlier in the year from Highly Pathogenic Avian Influenza (HPAI). Prices then dropped as flocks were repopulated and late summer demand fell. Now, leading up to the fall holiday season, we see egg prices spiking again, and they are higher than they were not only in 2023 but also higher than the same time in 2022. Later in 2022 wholesale egg prices reached an all-time high approaching $5.00/doz. (fig 1). When we compare 2022 to 2024, we see a haunting premonition of where egg prices could be headed this holiday season. The current price spike looks to be holiday demand coming in the face of a decrease in layers producing the eggs; the same thing we saw in 2022.
When we compare current 2024 numbers to the same timeframe in 2022 and 2023, there are a few comparable trends worth noting. Current shell egg inventory and layer numbers have dropped 13.7% and 3% respectively from the previous year, while price is significantly higher (over 300%). The current price is also 22% higher than the same time in 2022 when the egg and layer inventories were very similar to now (fig 2). It’s possible we could see the same prices on the horizon as we saw in late 2022.
While the supply and demand numbers may not bode well for egg consumers, layer producers have additional concerns. December corn is currently trading in the $4.28/bu. range and looks to stay below $4.60 through spring according to the USDA futures price estimates. This looks to be a positive for egg producers as the resulting lower feed cost could help egg producers recover from their losses as well as last year’s low egg prices – IF they have the hens to produce the eggs. The concern is that the HPAI threat still looms large over the layer industry. HPAI losses are driving the current low inventories of layers and eggs. In October of this year, 2.84 million layers were lost to HPAI to begin the holiday season. Year-to-date, the layer industry has lost 20.75 million layers, which equals 6.8% of the total current flock of producing hens. It is difficult for layer producers to keep up with current demand in the face of such losses. And now, the fall waterfowl migration is ramping up, bringing with it an increased HPAI risk. According to the USDA, there are currently only 4.1 days of shell eggs on hand for sale. Therefore, any additional hen losses could have a significant impact on the market. Whether 2024 prices will reach the highs of 2022 remains to be seen, but if HPAI continues to devastate producing layer flocks, prices this year could reach and even surpass 2022.
Figure 1: Egg prices were relatively stable, though above last year, until mid-summer, when they spiked due to laying hen losses that occurred earlier in the year. Prices spiked again this fall due to a convergence of additional hen losses to HPAI and an increasing demand for the holidays.
Figure 2: Laying hen inventory and egg inventory for 2024 looks hauntingly like 2022, when late season egg prices rose to historical levels
Whole Farm Revenue Protection (WFRP) is a crop insurance product administered by the USDA Risk Management Agency (RMA). WFRP provides protection against the risk of farm revenue generated by all crops falling below a level of guaranteed revenue. Expected revenue is found by taking the most recently available five-year average of whole farm revenue reported on the Schedule F farm income tax form. For example, the expected revenue for 2024 is found by taking the average of revenue reported in 2018-2022. Subsequently, the expected revenue is multiplied by the producer-elected coverage level to determine the guaranteed revenue or WFRP liability. The WFRP revenue guarantee is capped at $17 million.
Like other multi-peril crop insurance (MPCI) products, the WFRP premium is subsidized by rates determined through federal legislation. The subsidy, or portion of the actuarially fair premium rate paid by the government, decreases as the elected coverage level increases. The WFRP producer premium may be further reduced through the Diversity Factor, which is a percentage multiplied by the actuarially fair rate. As the number of qualifying commodities insured increases, the greater the discount in the actuarially fair premium rate. Lastly, the WFRP producer premium may be reduced for those producers who have Beginning Farmer or Rancher or Veteran Farmer Status. Combining all three of these producer premium reductions can result in up to a 90% reduction in the actuarially fair premium.
While the increasing trend in federal crop insurance participation since its inception can be largely attributed to increases in the premium subsidy rate, not all programs have experienced the same utilization (Yehouenou et al., 2018). Yehouenou et al. (2018) cite the reluctance of crop insurance agents to encourage purchasing STAX as one reason for the lack of participation despite the 80% premium subsidy rate attached to all coverage levels. Whole Farm Revenue Protection also faces a lag in participation and has experienced a decline in purchased liability since its inception in 2015. Average purchased liability of about $2 billion per year (Figure 1), which is far less than yield protection (YP) and revenue protection (RP) purchased liability which averaged over $100 billion over the same period (Figure 2).
One issue driving the lack of federal crop insurance participation is a lack of understanding of crop insurance programs. In response to this knowledge gap, RMA set up a number of cooperative agreements to build relationships, enhance understanding, and strengthen the public-private partnership of federal crop insurance across the agriculture community. In 2022, the University of Arkansas partnered on a two-year pilot program with RMA, the Crop Insurance Navigator program. The Navigator project seeks to address “knowledge gaps” of RMA products with a focus on historically underserved producer communities. The partnership is funded by the USDA Risk Management Agency. This southern region focused pilot is primarily designed to address the knowledge gaps present in WFRP and Micro-Farm products on both the part of producers and crop insurance agents. The program uses a cohort of project specialists to engage farmers, ranchers, educators, community-based organizations, and agricultural stakeholders to enhance understanding of federal crop insurance products serving small and historically underserved producer groups. To learn more about the Crop Insurance Navigator program visit https://srmec.uada.edu/navigator.html.
In an aligned effort to enhance understanding of crop insurance, UA faculty led the development of a workbook covering the fundamentals of federal crop insurance to educate producers, crop insurance agents, and policymakers with chapters on products and opportunities for socially disadvantaged farmers and ranchers. To access the workbook follow this link:https://www.uaex.uada.edu/publications/pdf/MP576.pdf
This figure shows changes in WFRP participation since 1999. Prior to the introduction of WFRP in 2015, Adjusted Gross Revenue (AGR) was made available in 1999 and provided coverage similar to WFRP.
This figure shows the changes in MPCI products providing farm-level yield and revenue risk protection such as Actual Production History, Revenue Assurance, Yield Protection, and Revenue Protection.
U.S. market awareness of mango, the world’s “King of Fruits,” has risen significantly since the new millennium began. In 2021, value-added fresh fruit aisles across US food outlets witnessed a 27.3% increase in dollar sales over the previous calendar year (Fig. 1). Chefs and home cooks continue to find ways to incorporate fresh-cut mango into menu offerings as a standalone fruit and as an ingredient in salsa, dessert, beverage recipes, and numerous other innovative uses. Industry experts are optimistic about future demand growth rates of ten percent or more over the next five to ten years for value-added mango. To continue introducing consumers to this nutrient-rich fruit’s candy-like flavor, we talked with industry professionals who work with value-added produce to learn how growers may better position themselves to sell into this supply chain.
Figure 1. Total U.S. multi-outlet fresh fruit and vegetable sales, nonvalue and value-added, 2021.
Source: Strailey, J. (2022, 28 February). “Value-added fresh produce sees continued growth.” The Packer.com.
While there exists an array of mango varieties available to the market, the Kent variety is preferred by large processors and food distributors, as it is less stringy, possesses a recognizable flavor profile, and is more suitable for processing in both size and year-round availability. There exists potential for smaller growers to process and market US-grown varieties to consumers who are looking for new and unique palate-pleasing flavors and textures for their menus.
Currently, a barrier to increased fresh fruit consumption and value-added processing is the difficulty (and injury risk) in peeling and coring mangos. There is potential for exploration and development of small-scale microtechnologies that may reduce the labor time and expense required to process mangos. We encourage entrepreneurial-minded growers to work with craftspeople to design and develop such equipment at costs that may be affordable to smaller-scale processors.
Adopting and adhering to a written food safety plan is of paramount importance for all participants in the mango industry across all product forms and marketing outlets. We recommend that growers invest time and resources in educating themselves and everyone involved in their supply chain to ensure regulatory compliance and transparency to buyers and auditors. This investment will provide dividends in the form of long-term business success, maintenance of customer relationships, and overall growth of the mango industry.
Sustainability factors, such as carbon neutrality, waste reduction, and fair labor practices, are growing important to the agricultural industry. Each of these factors impacts the bottom line of a value-added business, whether in the form of market access, financial performance, or impacts of regulatory policies and procedures. We suggest that Southeastern mango growers and processors spend time discussing and gathering information from company leadership, managers, and employees to review the variables in sustainable practices and implement a select few that best match the fruit grower’s mission and core values.
Funding Statement: This work was supported by the National Mango Board.
