Yields Projected Up but Production Costs Also Rising
Bryce Knorr, senior analyst with Farm Futures Magazine, recently presented at an event Citizens National Bank co-hosted with Williamson Insurance Agency. Knorr pointed out 2017 is the first year since 1983 that farmers plan to plant more soybeans than corn and pointed to increased production costs as the reason for lower profit margins than the 1980’s. Expected acreage of corn planted is projected to be down 3.7% while soybeans are projected to be up 8.5%. According to Knorr the USDA estimates yields for corn will be on average 174.6 bushels/acre and bean yields will be 15% higher than 2016 at 52.1 bushels/acre.
He predicts net farm income will be down again in 2017 and noted that the debt to asset ratio is trending upward – “although nowhere near the level of the 1980’s,” he assures. He feels rising interest rates may dampen land prices, although he was optimistic that there’s interest by money managers and hedge funds in buying more ag contracts. Average cash rent in Ohio is $150 per acre, which is flat from 2015-2016, which also plays into the cost of land prices not increasing.
Knorr’s advice to farmers was to remain cautious. He notes many farmers have purchased land or new equipment over the past few years when prices were at all-time highs. The difference he notes from the 1980’s crisis however was that most of them used excess cash to make those purchases rather than leveraging everything through loans. “This puts current farms in much better positions than in the past,” he notes.
In addition to analyzing and writing about the commodity markets, Knorr is a former futures introducing broker and is a registered Commodity Trading Advisor. He conducts Farm Futures exclusive surveys on acreage, production and management issues and is one of the analysts regularly contracted by business wire services before major USDA crop reports.
Economist Robert J. Morgan, Austin Associates, LLC
“We’ve seen more growth in the last 6 quarters than the last 4-5 years,” stated Robert Morgan, economist with Austin Associates, when he recently spoke to several of Citizens National Bank’s business customers about the economic outlook for 2017. That statement speaks volumes about the direction Morgan feels our country is taking in regards to economic activity and the opportunity for businesses to expand over the next year. Real Gross Domestic Product (GDP) has traditionally trended around 2.5-3% for the US. Since the recession in 2009, that number has averaged below 2%. That changed in 2016 and Morgan predicts real GDP to be somewhere near 3.5% by the end of 2017. Seventy percent of real GDP is driven by personal consumption expenditures, how much people are willing to buy based upon their confidence in the economy and employment. Consumer confidence reached a record level in 2016. That combined with improved employment rates will result in continued spending by consumers.
Areas Morgan feels will contribute to that growth will be automotive and housing. “Vehicle sales will continue to increase as the average age of the fleet of cars in the US is still 9.3 years old,” explains Morgan. Home values will continue to rise as inventory of existing homes is extremely low and people will begin to build new homes in order to get the type of home they want. This will result in a strong construction sector.
“Cash balances for businesses have grown as business owners took a wait and see approach and held on to their capital. Their confidence is also beginning to build and they will begin to invest in fixed investments and expansion as their inventory has largely sold out and they need to create more product,” states Morgan.
Of course there are always uncertainties in the economy and Morgan cautions this optimistic outlook is based upon a labor market that continues to grow and foreign economic conditions not adversely affecting our domestic economy. Uncertainty about fiscal policy in regards to taxes, rising interest rates, increased regulation, and the simple demographics shift that shows baby boomers as the largest segment with very different needs and wants than the growing millennial generation will also play part in trends we see in the US economy. But overall, Morgan is very optimistic that we’ll continue to see positive growth over the next year.
To view the entire presentation, visit our YouTube channel – www.youtube.com/cnbohio.
Provided by the Consumer Federal Trade Commission
It’s that time of year — tax time. It’s also a great time to get up to speed on tax-related scams. Here are two ways tax scammers might target you and what you can do about it:
Tax identity theft
This kind of identity theft happens when someone files a fake tax return using your personal information — like your Social Security number — to get a tax refund. Tax identity theft also happens when someone uses your Social Security number to get a job. You find out about it when you get a letter from the IRS saying:
- more than one tax return was filed in your name
- IRS records show wages from an employer you don’t know
IRS imposter scams
This time scammers aren’t pretending to be you — they’re posing as the IRS. They call you up saying you owe taxes, and threaten to arrest you if you don’t pay right away. They might know all or part of your Social Security number, and they can rig caller ID to make it look like the call is coming from Washington, DC – when it could be coming from anywhere. Leaving you no time to think, they tell you to put the money on a prepaid debit card and tell them the card number right away.
The real IRS won’t ask you to pay with prepaid debit cards or wire transfers, and won’t ask for a credit card number over the phone. When the IRS contacts people about unpaid taxes, they usually do it by mail. You can report IRS imposter scams to the Treasury Inspector General for Tax Administration (TIGTA) online or at 800-366-4484, and to the FTC at ftc.gov/complaint.
IdentityTheft.gov is the federal government’s one-stop resource to help you report and recover from identity theft. You can report identity theft, get step-by-step advice, sample letters, and your FTC Identity Theft Affidavit. These resources will help you fix problems caused by the identity theft.
On Tuesday, January 24 beginning at 8:30 am, Citizens National Bank and Williamson Insurance Agency will jointly offer a free seminar to local farmers and ag businesses. The event will be held at the Delphos Eagles Aerie #471, 1600 E. 5th Street, Delphos, Ohio. A continental breakfast will be served prior to a presentation by Williamson Insurance describing an overview of annual crop insurance changes and what farmers can expect in the upcoming year. Featured speaker, Bryce Knorr, Senior Market Analyst with Farm Futures Magazine, will follow with the main presentation. Lunch will be served immediately following.
About Bryce Knorr: Senior Market Analyst Bryce Knorr first joined Farm Futures Magazine in 1987. In addition to analyzing and writing about the commodity markets, he is a former futures introducing broker and is a registered Commodity Trading Adviser. He conducts Farm Futures exclusive surveys on acreage, production and management issues and is one of the analysts regularly contracted by business wire services before major USDA crop reports.
Those wishing to attend may RSVP to 888-399-5276 by January 21.
Instant Balances Now Available through our Mobile App!
If you haven’t updated your CNB Mobile App recently you’re missing out on its newest feature, Instant Balances. This enhancement makes it possible for you to designate which accounts you’d like to to be able to view current balances of without even having to log in to the app. Setting it up is easy – update your app, log in, then click More in the bottom right corner. You’ll see a button for Instant Balances Settings on the left side. A list of all your accounts will show. Simply checkmark which accounts you’d like to include and Save. The next time you open your app, you’ll see a dollar sign in a circle in the upper right corner. Tap on that to view balances for the accounts you selected. You may choose up to 6 accounts to view in Instant Balance. View a demo to see how it works.
– See more at: www.cnbohio.com/AboutUs/CNBNews/CNBConnection/Default.aspx
There are a lot of factors to consider when determining the costs of purchasing a home. Fortunately, our website, cnbohio.com, has a variety of mortgage calculators available for you to input different scenarios in order to understand what makes the most sense for you. These interactive calculators are easy to use and address many different questions you may have, such as “What’s the Maximum Mortgage I qualify For?”, “Should I Consider a 15 Year vs. a 30 Year Mortgage Term?” and “Should I Buy Points to Get a Smaller Monthly Payment?”. These calculators are a good starting point as you begin to look at your finances and work with your lender.
Here’s a list of all the Mortgage Calculators available on our site. Check them out:
- Adjustable Rate Mortgage Calculator
- ARM vs. Fixed Rate Mortgage
- Maximum Mortgage
- Mortgage Comparison: 15 Years vs. 30 Years
- Mortgage Loan Calculator
- Mortgage Points Calculator
- Refinance Interest Savings
- Rent vs. Buy
Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.