In the spring edition of the Agricultural Policy Review, Iowa State University agricultural economist Wendong Zhang penned an article titled, "Four Reasons Why We Aren’t Likely to See a Replay of the 1980’s Farm Crisis," where he explained that, "There are plenty of alarming signs indicating a possible farm crisis: current corn prices are half the 2013 peak level of US $7/bushel; farm income has declined for major commodities (corn, wheat, cattle), falling from the previous year to levels well below recent years; weak farm income and worsening credit conditions continue to trim farmland values, which are expected to trend lower in the months ahead, thus weakening the equity position of producers and the collateral value for lenders. Given the heightening farm financial crisis, many agricultural lenders, academics, and other stakeholders in the US farm sector worry another farm crisis is looming. However, there are four economic and legal reasons why this farm downturn is unlikely to slide into a sudden collapse of agricultural markets."
On Wednesday, the Federal Reserve Board released its May 2017 Beige Book update, a summary of commentary on current economic conditions by Federal Reserve District. The report included several observations pertaining to the U.S. agricultural economy.
Yesterday, the Senate Ag Committee held a hearing titled, "Examining the Farm Economy: Perspectives on Rural America," where lawmakers heard testimony from four witnesses, including the Chief Economist from USDA, and a Federal Reserve Bank district economist. Today's update provides an overview of yesterday's meeting with particular emphasis on crop prices, land values, and trade. Recall that the House Ag Committee held a similar hearing on the farm economy back in February.
Donnelle Eller reported on the front page of Sunday's Des Moines Register that, "This year could be pivotal for many Iowa farmers, battling to turn a profit as they plant 23.4 million corn and soybean acres across the state. Financial pressure is beginning to show."
Secretary of Agriculture Sonny Perdue testified before the House Agriculture Committee yesterday at a hearing on the “State of the Rural Economy.” Today's update includes an overview of the testimony provided by the former GOP Governor of Georgia, as well as as some of the issues lawmakers addressed during the hearing, which lasted over three hours.
Yesterday's Wall Street Journal included a special section on agricultural issues. The section included several articles that covered a variety of different topics ranging from urban farming, to creative new uses for crops, to export shipping issues. Today's update highlights articles in yesterday's paper that focused on farmer's adaptation to weather changes, the use of big data, and the ultrafiltered milk trade dispute with Canada.
On Thursday, the Federal Reserve Banks of Chicago, St. Louis and Kansas City each released updates regarding farm income, farmland values and agricultural credit conditions from the first quarter of this year. Today's update provides a brief overview of yesterday's reports.
Secretary of Agriculture Sonny Perdue visited an Iowa farm on Friday and took questions from producers. In his remarks, Secretary Perdue addressed a number of issues; today's update focuses more narrowly on his comments relating to trade and biofuels. Also, Secretary Perdue was in Arkansas on Sunday to survey flood damage with Arkansas Governor Asa Hutchinson.
Today's update looks briefly at the U.S. agricultural economy from a variety of perspectives. A recent news report has shown that some Corn Belt producers may be losing money from farming this year, while a survey of agricultural lenders this month demonstrates that many are concerned about commodity prices, liquidity and farm income. Secretary of Agriculture Sonny Perdue has stated that U.S. farmers won't be worse off if NAFTA is renegotiated, and adverse weather conditions continue to adversely impact farmers and ranchers in the Nation's midsection.
A recent article from the Federal Reserve Bank of Minneapolis discussed the downward economic trajectory that has impacted the U.S. farm economy in recent years. Secretary of Agriculture Sonny Perdue, in remarks this week to USDA employees, noted that trade is an area that could help provide relief for surplus stocks. News reports yesterday indicated that President Trump could sign an executive action withdrawing the United States from the North American Free Trade Agreement; since NAFTA's implementation, U.S. agricultural trade has grown significantly. However, subsequent news developments explained that Trump had decided not to pull out of NAFTA. Many in the agricultural sector are already anxious about U.S. trade policy, yesterday's executive branch actions on trade may not alleviate ongoing concerns.