Webinar: Farm Income and Financial Forecasts, November 2019 Update

Date: Wednesday, November 27, 2019 

Time: 1:00 PM EST 

Duration: 1 hour

Host(s): Carrie Litkowski, Economist, Economic Research Service, USDA

Description:

During this webinar, economist Carrie Litkowski provides an updated farm sector income and wealth forecast for calendar year 2019. Forecast details include cash receipts, other sources of income (including government payments and insurance indemnities), production expenditures, off-farm income, and breakouts by major commodities and regions.

Member Blog: David Zilberman

On the Frontier and Management of Science 

David Zilberman, professor, agriculture and resource economics | November 15, 2019

The World Laureates Association (WLA) is an initiative of a Shanghai businessman, Wang Hou, and several Nobel laureates, and as I understand, is supported by the municipality of Shanghai. I was fortunate to be present at the second annual meeting in late October in Shanghai. There were about 72 laureates present at the meeting, including over 50 Nobelists and winners of the Wolf, Lasker, Fields, and Turing awards, as well as MacArthur fellows. This meeting was an incredible “crash course” on the frontier of science, with excellent presentations by the laureates and young scientists.

What’s going on at the frontier?
One of my takeaways from this meeting is that life must exist outside of our planet. In the last few years, scientists have discovered thousands of new planets, each of which is different, but some of which have conditions that could be  hospitable to life. Finding these planets, numerous lightyears away. is an incredible achievement combining innovative theory, observation, and technology. Recalling telescope was invented less than 600 years ago, we’ve gone from believing the Sun rotated around the Earth to realizing that we live in a small planet in an ever-expanding universe. It seems space exploration has become a realistic part of the scientific and technological agenda. It probably won’t be in my lifetime, but if human civilization survives, we may be able to meet other creatures.

While meeting with aliens is more likely to be in the far future, our discussion suggested that within the next 20 years, we are likely to start solving two mysteries. One is the mystery of dark matter and the other is the mystery of the “dark box” that is our brain. I was astonished to learn that only recently scientists realized most of the universe contains dark matter, and now have started to learn its properties. Additionally, our capacity to develop advanced computers, monitoring hardware, and sophisticated software will allow us to better understand the supercomputer that is the human brain. Moreover, medical researchers seem to be more confident that in the next 20 years they will be able to solve many of the mysteries of the flu and cancer. Science will continue to eliminate disease and increase human life expectancy (but we still need to address climate change and be able to live in peace with one another). But the future may hold many surprises. Life science and information technology may expand human capabilities, which challenges us to develop ethical principles to guide the utilization of knowledge and technology. This reminds us of the importance of affirming constructive interactions between the humanities, social sciences, and natural sciences.

Major issues in Economics and Technology
I participated in a panel on economics directed to students and a general audience. We learned from Prof. Thomas Sargent that a unique feature of economics, compared to other sciences like astronomy, is that while scientists predict future outcomes from observing past events, in economics, agents need to predict future behaviors of other agents in order to inform their own activities. Understanding the mutual interaction among economic agents is crucial for better analysis of the economy. Some of my students wonder about whether behavioral economics has made traditional economics obsolete. Behavioral economics identifies patterns of behavior that are not consistent with the standard assumptions of profit-maximization or self-interest more broadly. However, Prof. Robert Aumann suggested that decision-makers operate under uncertainty and decide on basic strategies to address various situations. These strategies are selected to maximize self-interest of agents on average, but they may fail in some cases. These are situations that are identified by behavioral economists. Behavioral economics helps to sharpen and improve the predictions of standard economics in these frameworks.
The audience was very curious about the future of work and well-being. Sir Christopher Pissarides actually suggested that recent history shows that new innovations that replace jobs generate new jobs, while also improving standards of living. While automation and new technologies may displace jobs, the new era will produce new opportunities. The challenge today is to develop government and private systems that will help people adapt and take advantage of new opportunities. I spoke about the education-industrial complex, where academic research discoveries are advanced frequently by private entrepreneurs who create supply chains that spur the development of new products and markets. We need to understand better the evolution of supply chains and the importance of market power and free enterprise in generating new industries. We have to improve policies regulating anti-competitive behavior by established firms. The presentations and discussion made it clear that science, technology, and commerce are linked today, and effective management of science is one contributor to economic growth.

Managing Science
An underlying question in this workshop was what makes good science. We heard many perspectives, but several common themes. One was the importance of academic freedom and the ability of scientists (since well before Copernicus and his fellow revolutionary Galileo) to pursue unconventional ideas. Research is an adaptive process, and when scientists follow the most reasonable path rather than a strategy dictated from above, they are likely to obtain the best results.We heard that science sometimes occurs when people with peripheral vision notice unusual phenomena. For example, Fleming discovered penicillin after seeing that mold growing on a contaminated plate destroyed the bacteria.

Another theme is the beneficial interdependence between different branches of science. Improved understanding of chemistry and physics improves the understanding of biology, better technologies provide new data that leads to discoveries, and advancing mathematics and computer algorithms generate new tools to move science forward. Furthermore there is also symbiosis between big science projects (traveling to Mars) and “small science,” conducted by scientists on their benches. Researchers who develop theories at their desks provide ideas provide ideas for big science projects, and the findings of these projects inspire small science. Countries that want to increase their scientific productivity should potentially invest in some major initiatives, but supporting many independent scientists to pursue their own goals and instincts is essential for sustaining the process of discovery.

A third theme is that peer-reviews and evaluation by fellow scientists of new research discoveries allow the identification of new viable theories and separate the wheat from the chaff. There is a tendency to reward scientists based only on numbers of citations or being able to publish in top journals. This formulaic tendency is dangerous, and cannot replace evaluation by peers based on assessment of publications’ intrinsic quality.
A fourth theme was that science is international and provides global public goods. Major big projects have become too expensive for one country and require the sharing of finance, research effort, and derived knowledge.The audience wondered why there haven’t been many Chinese Nobelists given the huge current investment in science. One answer is that there is generally a significant time lag between discovery and reward, and most prestigious prizes are given to work from decades ago that has withstood the test of time. Therefore, as China and other countries continue invest in scientific enterprise, it is likely to see more recognition in term of awards in the near future. The laureates, all veterans of the “Long March” of post-WWII science, has recognized that China has now become a vital ally in this great human endeavor. It’s only reasonable to expect them to share the rewards as we pursue new horizons together.

This spirit of cooperation was everywhere evident in from the wonderful hospitality of our hosts, including excellent facilities, food, and outstanding support staff. Our meeting closed with another reminder of China’s dramatic progress, an amazing night time tour of the Shanghai skyline. I visited the same place 10 years ago, barely recognizable from a visit 20 years ago, and just as startling today. Seeing the potential of determined commitments to innovation and progress, both among my colleagues and hosts, I look forward to the future.

Members in the News: Miller, Hayes, Zhang, Lubben, Schatzer, Newton, Coble, Janzen, Haynes, and Walters

Corey Miller, Mississippi Institutions of Higher Learning Why Alabama and Mississippi have suddenly gone in opposite directions By: The Washington Post - November 9, 2019 “The education, training and skills that employers want? They may not be finding it,” said Corey Miller, an economic analyst at University Research Center in Jackson, Miss. He added later that, because the state’s workers are less skilled, it has taken them longer to train and find work even as the labor market tightens. (Continued...) Read more on: The Washington Post Dermot Hayes, Iowa State University Wendong Zhang, Iowa State University This Trade Rally Is One Tweet Away From a Crash By: The Washington Post - November 8, 2019 It’s a similar case with agriculture. China could increase its imports of poultry, beef, pork and other products by as much as $53 billion just by removing current constraints on trade, according to a study last year by Minghao Li, Wendong Zhang and Dermot Hayes of Iowa State University. (Continued...) Read more on: The Washington Post Wendong Zhang, Iowa State University In Early Voting States, the Economy Is Working in Trump’s Favor By: Bloomberg - November 12, 2019 Economist Take: “Many farmers view this as a short-term pain, long-term gain phenomenon, hoping that this will result in a structural reduction of trade barriers in dealing with China and that there will be more and greater amounts of products going to China at the end of this,” said Wendong Zhang, co-founder of Iowa State University’s Center for China-US Agricultural Economics and Policy.  (Continued...) Read more on: Bloomberg Brad Lubben, University of Nebraska-Lincoln Rural Poll shows mixed opinions on higher education By: Grand Island Independent - November 10, 2019 Current economic conditions may account for some of these differences, according to Brad Lubben, extension associate professor and policy specialist at the University of Nebraska–Lincoln. “In a tight job market like we now have, employers may be happy just to have a good candidate, so the extra value of having a degree with higher skills or qualifications may not be rewarded or immediately noticeable,” Lubben said. (Continued...) Read more on: Grand Island Independent Joe Schatzer, Oklahoma State University OSU’s Schatzer honored for enhancing students’ learning experiences By: Bartlesville Examiner-Enterprise - November 13, 2019 Joe Schatzer of Oklahoma State University’s Department of Agricultural Economics has been named a 2018 recipient of the Regents Distinguished Teaching Award. (Continued...) Read more on: Bartlesville Examiner-Enterprise John Newton, American Farm Bureau Federation Keith Coble, Mississippi State University Farm Economy: ‘We’ve Been Here Before’ By: Lancaster Farming - November 7, 2019 “We’ve been here before,” said John Newton, chief economist of the American Farm Bureau Federation. Newton and other ag economists spoke during an Oct. 22 Farm Foundation Forum at the National Press Club in Washington. In the long run, trade may not be the biggest problem China poses, said Keith Coble, head of the Department of Agricultural Economics at Mississippi State University. (Continued...) Read more on: Lancaster Farming Joe Janzen, Kansas State University Against the grain: As wheat prices slip, farmers shift acres to other crops By: The Hutchinson News - November 14, 2019 “Over the last four to five years we’ve seen relatively low wheat prices and persistent declines in acreage,” said Joe Janzen, professor of agricultural economics at Kansas State University. According to Janzen, if this continues, Kansas farmers will shift toward other crops. However, he pointed out, if the price of wheat increases, the farmer will rebound to wheat. (Continued...) Read more on: The Hutchinson News George Haynes, Montana State University Study looks at Hutterite impact on state economy, jobs By: Great Falls Tribune - November 8, 2019 “The study highlights the importance of the Hutterite Communities in diversifying Montana’s agricultural production,” George Haynes, an MSU professor of agricultural economics, said in a news release. “They implement cutting-edge technologies to help promote efficiency and reduce labor requirements in their operations, allowing them to venture into underdeveloped markets in the state.” (Continued...) Read more on: Great Falls Tribune & KXLH Cory Walters, University of Nebraska-Lincoln Farm survival workshop on crop insurance and marketing in your area By: KTIC - November 14, 2019 “Understanding production risk becomes especially important as farm locations move farther from the center of the corn belt,” said Cory Walters, associate professor in the Department of Agricultural Economics. “These workshops are designed to assist Nebraska farmers improve their decision-making and understand the role of production risk considerations in their marketing plans.” (Continued...) Read more on: KTIC

See other Member in the News items Know another AAEA Member who has made statewide, national, or international news? Send a link of the article to Allison Scheetz at ascheetz@aaea.org What research and topics are you working on? Want to be an expert source for journalists working on a story? Contact Allison Scheetz at ascheetz@aaea.org.

USDA Webinar: Rural America at a Glance, 2019 Edition

In this webinar, ERS Economist John Pender highlights the most recent indicators of social and economic conditions in rural areas, focusing on county-level population trends, employment, income, and poverty. The USDA's Economic Research Service releases the Rural America at a Glance report annually, which summarizes the status of conditions and trends in rural areas.

Date: Wednesday, November 13, 2019

Time: 4:00 pm EST

Duration: 1 Hour

Host: John Pender, Economic Research Service, USDA

Join/register here.   

Test your computer for compatibility prior to the meeting.

Members in the News: Malone, Bozic, Roe, Zhang, Chen, Katchova, Newton, Coble, Mintert, and Wolf

Trey Malone, Michigan State University This foreign meat company got U.S. tax money. Now it wants to conquer America. By: The Washington Post - November 7, 2019 Consolidation can lead to benefits for consumers. Trey Malone, an agricultural economist at Michigan State University, said consolidation has led to lower prices and an explosion of new food products. A grocery store in 1995 had about 8,000 options on average. Now, it’s more than 45,000. “As companies get larger, you get economies of scale. The cost of production per unit decreases,” Malone said. “Companies increasingly compete at quality levels, offering hormone-free meat, Angus beef. They create new products. From a consumer perspective, you have higher quality meat and cheaper meat products.” (Continued...) Read more on: The Washington Post Marin Bozic, University of Minnesota Milk Revival Boosts Battered Farmers in Key States for Trump By: Bloomberg - November 5, 2019 “People will recover some footing,” said Marin Bozic, a dairy economist at the University of Minnesota. “They’re stepping back from the brink. And they have time to make strategic decisions on their own terms.” (Continued...) Read more on: Bloomberg Brian Roe, The Ohio State University Study: A lot of food goes into the fridge to die The Columbus Dispatch September 2, 2019 There’s a $218 billion design problem sitting in your fridge right now Fast Company September 3, 2019 Study: Shoppers overestimate perishable grocery habits, causing food waste Waste Dive September 9, 2019 New research shows reducing food waste at home starts in your refrigerator Hello Homestead September 10, 2019 How to Tell Whether Expired Food Is Safe to Eat Yahoo News - Consumer Reports September 21, 2019 Wendong Zhang, Iowa State University 3 reasons Midwest farmers hurt by the U.S.-China trade war still support Trump The Conversation Midland Daily News November 4, 2019 Opinion: Here’s why corn and soybean supporters are standing by President Trump despite their pain Market Watch November 4, 2019 Why Farmers Still Support Trump Successful Farming November 5, 2019 Majority of farmers support Trump’s Chinese tariffs, survey finds Brownfield Ag News November 5, 2019 Joyce Chen, The Ohio State University Rising sea levels are making traditional ways of life impossible. Rural Bangladeshis are having to adapt to survive. BBC September 2, 2019 Changes in worker program has benefits for finding farm labor Ohio's Country Ag Journal October 14, 2019 2019 Veterans Day Money Survey WalletHub November 4, 2019 Ani Katchova, The Ohio State University Federal Aid Helps Increase Ohio Farmer Incomes Despite Wet Spring, Less Crops WOSU Public Media October 23, 2019 Despite tough crop year, Ohio farm incomes forecast to rise Ohio Farmer October 30, 2019 John Newton, American Farm Bureau Federation Keith Coble, Mississippi State University Warning signs abound in today’s farm economy By: High Plains Journal - November 4, 2019 The Farm Foundation, Oct. 22, hosted its monthly forum, titled, “Farm Economy: Issues and Impacts.” The forum’s slate of economic experts included: John Newton, chief economist of the American Farm Bureau Federation; Seth Meyer, associate director and research professor, Food and Agricultural Policy Research Institute, University of Missouri; and Keith Coble, professor and head of the Mississippi State University department of agricultural economics. Newton said that while it’s true that net farm income in 2019 is in the top 30% of all time, strip away the federal aid packages from natural disasters, prevented planting, trade aid and more, the economic story is quite different. It actually brings the net farm income down to $69 billion, or in the bottom 50% of all time farm incomes. (Continued...) Read more on: High Plains Journal James Mintert, Purdue University Crop Pest Management Short Course – Dec. 10-12 By: The Green Sheet Farm Forum - November 1, 2019 James Mintert is a professor and Extension economist in Purdue’s Department of Agricultural Economics and serves as director of Purdue’s Center for Commercial Agriculture. Mintert will review and update the status of trade wars, commodity prices, regulations, interest rates and farm policy, as well as farmland values and rental rates, which can all affect farmers’ attitudes and well-being. Purdue’s Ag Economy Barometer will also be presented which is a monthly nationwide survey of U.S. crop and livestock producers that provides an ongoing measure of farmer sentiment and helps highlight the key factors driving shifts in farmers’ perspectives and what that means for the U.S. farm economy. (Continued...) Read more on: The Green Sheet Farm Forum Chris Wolf, Cornell University Tough times call for financial decision making By: Hoard's Dairyman - November 1, 2019 At World Dairy Expo, Chris Wolf, a professor in Agricultural Economics and Management at Cornell University, presented a seminar on the sometimes dreaded topic of dairy farm finances and decision making. During the presentation, he shared benchmarks for dairy farms, discussed long-term investments, and elaborated on management modifications. (Continued...) Read more on: Hoard's Dairyman

See other Member in the News items Know another AAEA Member who has made statewide, national, or international news? Send a link of the article to Allison Scheetz at ascheetz@aaea.org What research and topics are you working on? Want to be an expert source for journalists working on a story? Contact Allison Scheetz at ascheetz@aaea.org.