Representative farms economic outlook ; 2017, January

The Agricultural and Food Policy Center (AFPC) at Texas A&M University develops and maintains data to simulate 94 representative crop, dairy, and livestock operations in major production areas in 29 states. The chief purpose of this analysis is to project the economic viability of those farms by region and commodity for 2017 through 2021. The data necessary to simulate the economic activity of these operations is developed through ongoing cooperation with panels of agricultural producers in selected states. The Food and Agricultural Policy Research Institute (FAPRI) provided projected prices, policy variables, and input inflation rates in their January 2017 Baseline. Under the January 2017 Baseline, 19 of the 63 crop farms are considered in good liquidity condition (less than a 25 percent chance of negative ending cash by 2021). Nine crop farms have between a 25 percent and a 50 percent likelihood of negative ending cash, and the remaining 35 crop farms have greater than a 50 percent chance of negative ending cash. Additionally, 25 of the 63 crop farms are considered in good equity position (less than a 25 percent chance of decreasing real net worth during the study period). Four crop farms have between a 25 percent and 50 percent likelihood of losing real net worth, and 34 crop farms have greater than a 50 percent probability of decreasing real net worth by 2021. The following discussion provides an overall evaluation by commodity considering both liquidity and equity measures. * FEEDGRAIN FARMS: Seven of the 22 feedgrain farms are in good overall financial condition. Four farms are classified in marginal condition, and eleven are in poor condition. * WHEAT FARMS: Three representative wheat farms are classified in good overall financial condition, none are in marginal condition, and eight are in poor condition. * COTTON FARMS: Five of the 15 cotton farms are classified in good condition, three are in marginal condition, and seven are in poor condition. * RICE FARMS: Three of the 15 rice farms are projected to be in good financial condition. Four rice farms are projected to be in marginal condition; eight are in poor condition. * DAIRY FARMS: Sixteen of the 20 dairies are in good overall financial condition. One dairy is classified in marginal condition, and three are in poor condition. * BEEF CATTLE RANCHES: One of the 11 cattle ranches is classified in good financial condition, four are in marginal condition, and six are projected to be in poor condition.