The House Agriculture Committee of the 115th Congress began laying the ground work for the next Farm Bill yesterday by holding a hearing to "review the economic challenges facing rural America." Although the majority of federal agricultural appropriations are related to nutrition issues, yesterday's hearing signaled that the rural and farm economy are priorities for the Committee and current economic conditions in the heartland "must be front and center" as the Farm Bill process begins.
In addition to trade issues, potential uncertainty associated with Trump administration immigration policies has some sectors of the agricultural economy anxious.
On Thursday, the Federal Reserve Banks of Chicago, St. Louis and Kansas City each released updates regarding farmland values and agricultural credit conditions from the fourth quarter of last year. The Fed reports, which contained concerning news for farmers, came on the heels of USDA's forecast that U.S. farm incomes will drop 8.7% in 2017, and on the same day that The Wall Street Journal ran a front page story titled, "The Next Farm Bust is Coming."
Jesse Newman reported yesterday at The Wall Street Journal Online that, "U.S. farm incomes will drop 8.7% in 2017, a fourth consecutive year of declines amid a deep slump in prices for many crops."
Recent news items suggest that anxiety in the agricultural community over Trump administration trade policy is not going away. After promising to renegotiate the North American Free Trade Agreement (NAFTA), floating the the idea of a 20% border tax adjustment or a tariff on Mexican imports, and pulling out of the Trans-PacifcPartnership (TPP), farmers are on edge about disruptions in export markets. In the past couple of days, from California specialty crops, to the U.S. livestock sector, to row crop growers in Nebraska and Illinois, agricultural reporters have scrutinized the potential impact of obstacles in agricultural trade flows. Other articles have shown that the future outcomes of trade policy remain uncertain.
A complex mix of agricultural economic variables help form the basis of what farmers and ranchers consider essential policy priorities. As Farm Bill conversations have already begun, today's update looks very briefly at several issues such as farm lending, production costs, commodity stock levels, and biofuels that have gained recent attention in the news.
Reuters writers Tom Polansek and Mark Weinraub reported on Tuesday that, "U.S. food producers and shippers are trying to speed up exports to Mexico and line up alternative markets as concerns rise that this lucrative business could be at risk if clashes over trade and immigration between the Trump administration and Mexico City escalate."
A recent study ("Income Trends for Iowa Farms and Farm Families 2003-2015") by David Peters, associate professor and extension rural sociologist with Iowa State University, summarized current trends in farm income by type of farm operation and pointed to more specific issues regarding the importance of non-farm income to the financial picture of farm households.
Nutrient-impacted water runoff from farm fields can have environmental consequences. A case filed by Des Moines Water Works (DMWW) involving financial damages from treatment of this water recently made its way to the Iowa Supreme Court. On Friday, January 27, the Iowa Supreme Court resolved one issue associated with the DMWW case; however, non-point source permitting issues under the Clean Water Act will still be considered by a trial court in June.
Donnelle Eller reported on the front page of Tuesday's Des Moines Register that, "President Donald Trump's decision to jettison the Trans-Pacific Partnership deal and renegotiate U.S. trade with Canada and Mexico could lead to a trade war that could put Iowa in the cross-hairs, worried state leaders told the Register on Monday."