Seward Rotarian Senator Mark Kolterman introduced Jay Reppe, Senior Economist for the Nebraska Farm Bureau, who gave a presentation to the Seward Rotary on Wednesday, April 29, 2020 at noon in a virtual Zoom meeting. He is formerly from Humboldt, holds two degrees from UNL and has been with Farm Bureau for 26 years. Todd LaVelle served as the program chair and the meeting was conducted by Rotary President Kurth Brashear, who recognized SHS Senior Garrett Erickson as the Youth Rotarian of the Month.
Seward Rotarian Senator Mark Kolterman introduced Jay Reppe, Senior Economist for the Nebraska Farm Bureau, who gave a presentation to the Seward Rotary on Wednesday, April 29, 2020 at noon in a virtual Zoom meeting. He is formerly from Humboldt, holds two degrees from UNL and has been with Farm Bureau for 26 years. Todd LaVelle served as the program chair and the meeting was conducted by Rotary President Kurth Brashear, who recognized SHS Senior Garrett Erickson as the Youth Rotarian of the Month.
Reppe’s presentation was “Ag and the Impact of the Corona-19-The Nebraska Ag Economy.” He first discussed the state of Production Ag as of 2018 in Nebraska, with total Ag Production at $23 Billion including Cattle/Calves at $10.6 Billion, Corn at $5.63 Billion and Soybeans at $2.59 Billion, which represents 98% of the total Ag receipts. He noted that there are 19 million acres in production and that total Cattle Production is 6.8 million.
Reppe also pointed out that other sectors influencing production were… Other Livestock, Grain Production, Feed and Pet Foods, Animal Processing (involving 28,000 jobs in Nebraska) and Ethanol production. He also noted that this does not include other Ag related businesses, such as the area Cooperatives, and related Ag businesses.
A line graph was displayed to represent the Net Farm Income for Nebraska over the last years. He noted on the graph that the “big “years were between 2011 -2013 and it has fallen off since, adding stress and concern for everyone involved. A bar graph he displayed pointed out that Farm Bankruptcies are up significantly but noted that the numbers are still small in relationship to the number of farms in Nebraska. For example, in 2010 -2014 there were less than 10 Farm Bankruptcies and last year there were 38 Farm Bankruptcies, also reflecting the “stress” in the economy and that the bankruptcies are growing.
A discussion followed on the impact of Land Values and the Annual Percent of Change in Land Values with charted data. He displayed data over the last 48 years and pointed out that land value has been up more times than depressed over that time frame. In fact, there were only 13 years in the last 48 that land values have been down. He also noted that not much land is on the market at the present time, with is a good sign. He stated that the land values this last year are still “creeping up” and this year still ‘hanging on,” which is a good sign as well, as it allows the farmer to continue with a stronger equity in their investment.
In relation to COVID-19, looking at the price changes in 2020 between January through Early April, there is Production Revenue with major losses. He said Beef Cattle were down -$823 Million, Pork was down -$124 million, and Corn/Soybean was down -$1.2 Billion with the only positive being Wheat and Grains up +4.1 million (which was due to the shortage and demand for flours during the quarantines.) Total Receipts were down -$2.14 Billion, which is down over 10%.
He noted the impact on the Ethanol Industry, with gas consumption down and prices continuing to drop. There are 11 Ethanol plants closed and two are reduced capacity, showing maybe a loss of $2.9 Billion. Overall, the industry is at only 41% capacity because no one is going anywhere and prices are very low. Reppe addressed the Animal Processing sector, discussing the issues with Workforce Health Concerns, Shutdowns and Reduced Capacities and the Animal Supply Line. He noted that the Slaughter Capacity is down and sources are trying to find other places to sell their animals/livestock.
The 2020 US Economy’s First Quarter was up 4.8% according to Reppe, however the second Quarter will definitely show a significant drop. The big question is the return cycle and how it will trend?
He commented on Trade and Value of the US Dollar, addressing the relationship with China as a major player. He noted China is a big dealer in Nebraska Soybeans and Pork, and ASF is popular in Asian with a high demand for Nebraska Protein and Beef.
Financial Aid packages for the ad sector was briefly addressed and he touched on programs to assist the local farmers. It was noted that there is a “Governor’s Task Force on Detasseling” that was created to assist and deal with Corona -19 Virus issues and is composed of Ag experts and field specialist to assist the teams and crews this summer.
The “Silver Lining” was also shared in that there are many positives in the Ag Industry right now. Farmers are enjoying lower fuel costs, lower fertilizer costs, reduced feed costs in lower prices with corn and soybeans. Interest rates are lower with land values stabilized. He also pointed to the new Ag ventures, such as the new Costco Plant in Fremont, with is a boost for the economy across Southeast Nebraska.
He concluded with a question and answer period and noted that while there will be many lasting changes as a result of this Pandemic, he was optimistic and stressed that the stable Ag Economy of Nebraska will continue to be strong and a force in Nebraska.