Since President Trump took office in January, many in the agricultural sector have been leery of potential executive branch actions on trade, particularly with respect to China and our NAFTA trading partners. As the NAFTA renegotiation process begins to unfold, the House Agriculture Committee held a hearing yesterday titled, "Renegotiating NAFTA: Opportunities for Agriculture." Today's update looks at some of the issues that lawmakers highlighted at yesterday's Ag Committee hearing.
On Tuesday, the Senate Agriculture Committee held a Farm Bill hearing that focused on commodity, credit, and crop insurance programs. This follows previous Farm Bill field hearings in both Kansas and Michigan, as well as Committee meetings on the farm economy, agricultural research, and conservation issues. Today’s update highlights issues that lawmakers discussed at yesterday's hearing, including crop insurance, payment limits and eligibility for farm programs, and base acres.
Recall that last month, trade rules regarding U.S beef exports to China were finalized. The U.S. had not exported beef to China since 2003, and on June 30th, an update from USDA indicated that, "U.S. Secretary of Agriculture Sonny Perdue today joined with U.S. Ambassador to China Terry Branstad to slice a Nebraska prime rib in a Beijing ceremony, formally marking the return of U.S. beef to the Chinese market after a 13-year hiatus." Today's update highlights a recent news report describing how this important trade policy change is beginning to impact market participants.
This week, the House Budget Committee unveiled, and subsequently passed, a 2018 fiscal year budget resolution. Meanwhile, the Senate Appropriations Committee on Thursday approved its fiscal year 2018 agricultural appropriations measure. Today's update provides additional details on these budgetary developments as the legislative process advances in anticipation of the next Farm Bill.
On Friday, Nathan Kauffman and Matt Clark, of the Federal Reserve Bank of Kansas City, penned an update titled, "Farm Lending Steady, but Risks Remain," which noted that, "Agricultural lending at commercial banks was steady in the second quarter, but risks in the farm sector continued to weigh on loan growth and credit conditions." Today's post looks at the Kansas City Fed article in more detail.
Associated Press writer Blake Nicholson reported on Saturday that, "Drought in North Dakota is laying waste to fields of normally bountiful food and hay crops and searing pastures that typically would be home to multitudes of grazing cattle. Some longtime farmers and ranchers say it’s the worst conditions they’ve seen in decades — possibly their lifetimes — and simple survival has become their goal as a dry summer drags on without a raincloud in sight."
Today's update looks at recent spending and budgetary issues impacting agriculture and the Farm Bill. The House Appropriations Committee this week passed the fiscal year 2018 appropriations bill for USDA. Meanwhile, recent reporting from Politico indicated that House Agriculture Committee Chairman Mike Conaway (R., Tex.) reached a "handshake agreement" with House Budget Chairwoman Diane Black (R., Tenn.) on potential cuts to ag and nutrition programs. And, the Congressional Budget Office recently released its latest baseline for farm programs.
On Wednesday, the Federal Reserve Board released its June 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.
Late last week, the U.S. Department of Agriculture updated its monthly agricultural trade data. The data contained some interesting information with respect to U.S. agricultural exports. The U.S. ran a small, but very rare monthly agricultural trade deficit in May; and, U.S. corn exports to Mexico from January through May of this year were down approximately seven percent from the same time last year. Today's update also includes recent perspectives on NAFTA renegotiation and agricultural issues.
Earlier this week, the Federal Reserve Bank of Dallas released the results of its 2017 Second Quarter Agricultural Credit Survey, which stated that, "Demand for agricultural loans overall decreased for a seventh consecutive quarter. Loan renewals and extensions continued to increase, albeit at a slower pace. The rate of loan repayment stabilized after declining for two years. Overall, the volume of non-real- estate farm loans was lower than a year ago, as was the volume of farm real estate loans. The volume of operating loans increased; all other loan categories’ volumes fell year-over-year this quarter."