News and Posts

A new federal reporting requirement aimed at reducing corporate crime will affect some Montana farmers, ranchers and businesses.  Beginning on Jan. 1, 2024, certain corporations, limited liability companies and other entities created or registered to do business in the U.S. will be required to report information about their beneficial owners to the Financial Crimes Enforcement Network, or FinCEN, within the U.S. Treasury Department.

Rural hospital closures in the United States have become a significant public health crisis, with over 100 rural hospital closures and 87 conversions to urgent care facilities since 2005. These closures, driven by a complex blend of economic, demographic, and policy factors, have far-reaching implications not only for healthcare access but also for the broader rural economy. While none of Montana’s 55 rural hospitals have closed or converted, 64% have sustained loss of services and 25% are at risk of closing/converting within two years.  

Robots are entering many industries, including healthcare, manufacturing, transportation, and agriculture, among others. As new technologies facilitate the automation of a growing number of tasks, the question looms whether machines will displace workers.  This concept is not new. People have worried about technological unemployment for centuries.

Businesses throughout the country are still struggling to fill job vacancies. Numerous factors are responsible for the tight labor market. The retirement rate of older workers rose in 2021, and workers retired at younger ages. Many workers reassessed their career aspirations and priorities before returning to the workforce following layoffs in 2020. Worker burnout increased among frontline workers and caregivers especially, and some of these workers have not returned to the workforce. Workers are also reshuffling between jobs in the same sector or between sectors.  

More than two-thirds of the U.S. crop workforce is foreign-born.As the U.S. economy grew in the twentieth century, U.S.-born workers moved out of farm work, and today less than 2 percent of the workforce is employed on farms. A similar story is playing out in Europe as well, and it has important implications for world labor migration, agricultural production, and international trade.  

It said that about 32 million people lost some of their government food assistance in March 2023 because the federal government ended emergence allotments (EAs). States could use EAs to increase Supplemental Nutrition Assistance Program (SNAP) benefits as long as the federal government still had its public health emergency (PHE) in effect and the state had issued an emergency or disaster declaration. 

Artificial intelligence (AI) is becoming more and more ubiquitous across many industries, and agriculture is no exception. One of the most promising applications of AI in agriculture is the use of chatbots. Chatbots are computer programs designed to simulate conversation with human users through voice or text messaging. 

2022 lease rates did not decline in Montana. Mostly, they were up slightly, following a pattern that has been seen for many years: average lease rates inch up, but once inflation is taken into account, they are just about the same as last year. 

Help wanted signs, which became a frequent sight in restaurant and shop windows by the end of 2020, are still common fixtures throughout the nation. A recent article in the Wall Street Journal focused on the growing number of employers who are finding employees in migrant communities.  The article highlighted the stories of several immigrants who came to the United States from Latin America after hearing about a high-paying job on social media. Some intend only to work in the United States for a few years, saving their earnings to invest in a new business enterprise in their home country upon their return.  

The CSKT Water Compact is an agreement between the Tribes, the State of Montana, and the federal government to settle disputes over water rights in and around the Flathead Indian Reservation in northwestern Montana. Essentially, the Tribes have given up most of their claims to water rights in exchange for more certainty around the ones they retain. 

Several lawmakers are currently trying to pass a bill, called the Farm Workforce Modernization Act, which would streamline the H-2A agricultural guest worker program and provide a pathway to citizenship for an estimated one million farmworkers currently residing in the United States (Peterson and Hackman 2022). The overall effects of the legislation, if passed, are difficult to predict.

This year, we partnered once again with Montana Wheat and Barley Committee and the USDA NASS Montana Field Office to add several economic questions to the annual wheat and barley variety survey.  Since the 2021 survey, sentiment about current and future profitability has fallen. Roughly 42 percent (the largest group of respondents) expected their profitability to decline over the coming year, compared with 25% in 2021. 40% expected profits to stay the same, and 18% expected improvement. 

In terms of raw spending, the Inflation Reduction Act (IRA) is the biggest piece of climate legislation ever passed in any country. Ageconmt’s Nick Haggerty recently gave a brief overview of the climate spending provisions. The bill amounts to a firehose of tax credits and other subsidies for all kinds of carbon emission-reducing technologies. Similarly, the CHIPS act passed shortly before the IRA directs $250 billion in federal spending towards semiconductor research and manufacturing, with the aim of keeping pace with China in the semiconductor technology race.  

Engineers have made remarkable strides in recent years to automate routine tasks on dairies, orchards, and in strawberry harvest. Strawberries and apples will likely soon be picked by robots rather than human hands. The engineering capabilities exist, though current prototypes may not yet be as efficient as human workers. As technologies improve, adoption on commercial farms will likely be gradual. Producers can prepare now for technological advances by investing in their workforce to improve technical and data analytic skills.

The Inflation Reduction Act, which just passed Congress, is a big clean energy and health care bill. It’s not really about reducing inflation at all. I explained in my previous post. But there is one big piece of the IRA that may be of particular interest to rural communities: $20 billion in programs for agriculture. This is a ton of funding for USDA programs that incentivize farmers, ranchers, and forest landowners to adopt soil and land conservation practices that mitigate climate change. These practices are sometimes referred to as climate-smart agriculture or natural climate solutions. 

Earlier today, President Biden signed the “Inflation Reduction Act” into law. It’s a huge bill that does a ton of different things. Some of these things will directly benefit farmers and ranchers, through increased funding for USDA conservation programs. I’ll tackle these provisions in my next post, but first I want to discuss what the bill is about overall. 

While parts of the state have been dealing with flooding, as a Bozeman Daily Chronicle article pointed out yesterday, other parts are still contending with drought. Several counties in North Central Montana are experiencing D4 “Exceptional Drought,” the most severe drought category. I’ve had a couple questions so I’m updating a post I wrote last year around this time.

In Montana and across the West, the rules and institutions we have for managing water were set up during very different times. Water supplies were more abundant and less variable than they are now, and are projected to be in the future. There was also a lot less competition for use of those resources. 

Weeds can be big issues for organic farms, where the broad range of herbicides available to conventional farmers cannot be used. In this post, we assign economic values to hard red spring wheat and lentil crop losses caused by creeping thistle (Cirsium arvense) using trial data collected by Kara Hettinger, Tim Seipel, and Pat Carr as part of an Organic Research and Extension Initiative grant.  

Russia’s invasion of Ukraine has rocked the global energy market. Oil and gas prices were already soaring for a variety of reasons (as detailed in my recent post), but the sanctions against Russia–one of the world’s largest oil and gas producers–along with the general uncertainty and volatility caused by a major European war have sent prices to levels unseen in nearly a decade. Since we derive such a high share of energy from fossil fuels, and since energy is an input to all products and services to some degree, high oil and gas prices are closely linked to the sustained high levels of overall inflation that the US is experiencing. But in this post I want to focus on one particularly interesting relationship: that between oil and food prices.  

More than 5 million seniors in the U.S.—or 7% of the population ages 60 and older—experienced food insecurity in 2019. A recent study finds that one in five Americans faces insufficient food at some point in their 60s and 70s. The same study suggests that food insecurity occurs more commonly at later stages of life than we previously thought. 

 
The average reported crop land lease rate in Montana was $36 per acre, an increase of $2 from 2020. Irrigated cropland, which has bounced around significantly over time in price, is now at $88 per acre, up from $85 in 2020. Dryland crop leases increased by $1 to $29 per acre. Pastureland rose above $7 per acre in nominal value for the first time since NASS has collected these data. After accounting for inflation, however, these values are relatively steady over time. 

 
The conversion of agricultural and forested lands to developed uses is, to a large extent, a natural byproduct of economic development. As our population grows, we’ll need more land for housing, schools, commercial and industrial production, and so on. Of course, however, there are tradeoffs and challenges that accompany an expansion of development-oriented land uses. Among these are obvious environmental problems concerning the potential loss of natural lands and wildlife habitat; challenges for the food system, such as a loss of productive farmland; and other urban-related problems such as increases in congestion and air pollution from more people commuting longer distances to their places of work.  

Year-over-year inflation, as measured by the Consumer Price Index (CPI), hit 7% in December. The US is now clearly experiencing its most serious bout of sustained inflation since the 1970s. There is ongoing debate about how much of the increase in CPI (which is constructed from the prices of a “basket” of common goods across many sectors) is broad-based, or mostly driven by a small number of important sectors that are dealing with special circumstances. But what isn’t in doubt is that a surge in energy prices is one of the most important factors.  

Help wanted signs are visible on nearly every street corner and store hours have been reduced. Employers and consumers are likely wondering why labor appears so scarce and whether these changes are the results of transient economic trends or more fundamental structural changes in the labor supply.  

In the U.S., about 80% of beef products are processed by four large companies: Tyson Foods, Cargill, JBS USA, and National Beef. As market concentration reaches this level, one would naturally wonder how much market power these firms possess and the implications for the upstream cattle sellers and downstream beef buyers.

In August, the U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS) released their annual farmland value estimates for 2021. The NASS estimates are derived from a survey, administered each June, in which farm operators are asked to estimate the market value of their land. For states with property transaction price non-disclosure rules, such as Montana, the NASS estimates represent one of the only publicly available sources of farmland value estimates. 

Numerous “Help Wanted” signs are appearing in drive thru windows and at the entrances to box stores, among other industries. This could be concerning to agricultural employers, who have historically served as only a temporary place of employment for new immigrants as they seek out work in other industries (Martin, 2002; Martin and Taylor, 2013). Card and Lewis (2007) show that the share of immigrants working in agriculture decreases the longer immigrants remain in the United States. What happens to the farm labor supply when there are abundant job openings in other industries that employ workers with less than a college education?

Last month the Northwest Power and Conservation Council released an update of their “Northwest Power Plan”, a 20-year roadmap for meeting the electricity needs of Montana, Idaho, Washington and Oregon. A previous version of this plan warned that coal plant retirements raised the risk of blackouts in the region. But this update calls for much heavier investment in renewable power generation, and is much more sanguine about blackout risk. The reason is the relentless plunge in the cost of renewables, which have defied energy experts’ opinions at every turn. The first two graphs in the figure below (from BloombergNEF) show the per-watt generation cost of solar and wind energy from 2020-2020.

The Montana NASS Office and the Montana Wheat and Barley Committee (MWBC) recently released the Montana Wheat and Barley Variety Survey. In previous years, MSU has helped MWBC run the survey. This year NASS administered the survey. Having NASS run the survey allows a larger sample size and better representation in the results. This year, the survey received 2,241 responses (1,885 usable). In comparison, we received 439 in 2020, the last year MSU administered the survey.

Today marks the first day of the new water year, which runs from October 1 of each year through September 30 of the next. Water managers count time using the water year because after Oct. 1, precipitation no longer matters so much for this year’s crops – instead, most of it will be stored in reservoirs and snowpacks and be used during next year’s growing season.

Recently, the Biden Administration has approved a permanent increase in the Supplemental Nutrition Assistance Program (SNAP) benefits, effective this October.  On average, SNAP participants will receive their monthly benefits at a level up to 25% higher than their pre-pandemic benefits, which implies a monthly increase of about $36 per person. Annually, the federal government will provide an additional 44.5 million dollars to the 103,000 SNAP participants in Montana to help them secure enough and healthy food for their families.

The potential spread of COVID-19 is still a major concern for employers, including farm employers. Given the delicate timing of agricultural harvest, a COVID-19 outbreak among workers could be devastating. Despite employer precautions, there were still numerous COVID-19 outbreaks on farms in 2020. In a forthcoming paper in the Applied Economic Perspectives & Policy, I examine the relationship between month-to-month variation in historical agricultural employment and changes in the incidence of confirmed COVID-19 cases and deaths within U.S. counties from April-August 2020.

Over the past few months, you have probably read an article, watched a news story or looked at a help wanted sign at a business.  It seems Montana businesses are having difficulty finding enough workers.  The articles and news stories have pointed to CV-19 health concerns, lack of day care options, enhanced unemployment benefits, lack of willingness to work on the part of some individuals, low pay by employers and lack of access to foreign worker programs as possible causes.  A recent report by Christopher Bradley (Senior Economist with the Montana Department of Labor and Industry) does an excellent job of providing some context to workforce issues in Montana.

Thanks to wildfires popping up all over the Northwest US (and Canada), Montanans have been dealing with a recent spate of smoky air. Here in Bozeman, we had days in which the peak Air Quality Index (AQI) exceeded 100 (signifying “unhealthy for sensitive groups”) for roughly a week straight, an unusually bad stretch for the area. Air quality fluctuates widely from year to year and even week to week, but as wildfire frequency is likely to continue to increase due to climate change, we can expect occasional stretches of bad air to become more commonplace as well.