A news release Wednesday from the Center for Agricultural and Rural Development at Iowa State University and Iowa State University Extension and Outreach indicated that, “It’s been a difficult year for farmers—the planting season saw an overabundance of rain and delayed planting, the United States’ trade war with China persisted, skewing both commodity prices and demand, and farm bankruptcies rose to the highest level since 2011. However, favorable interest rates, strong yields, and limited land supply combined to help drive Iowa’s farmland values up for only the second time in six years.”
Keith Good
Keith Good is the Farm Policy News editor for the farmdoc project. He has previously worked for the USDA’s National Agricultural Statistics Service, and compiled the daily FarmPolicy.com News Summary from 2003-2015. He is a graduate of Purdue University (M.S.- Agricultural Economics), and Southern Illinois University School of Law.
Doubts Emerge About Chinese Agricultural Purchases of $40-$50 Billion After Initial Deal, “How Would They Do It?”
Don Lee and Alice Su reported in Saturday’s Los Angeles Times that, “The United States and China reached a preliminary trade agreement that includes the rollback of some tariffs on Chinese imports and a commitment by Beijing to make a substantial increase in purchases of American farm goods and other products and services.”
U.S. and China Reach Initial Trade Deal
Lingling Wei, Bob Davis, William Mauldin and Josh Zumbrun reported in Friday’s Wall Street Journal that, “President Trump has agreed to a limited trade agreement with Beijing that will roll back existing tariff rates on Chinese goods and cancel new levies set to take effect Sunday as part of a deal to boost Chinese purchases of U.S. farm goods and obtain other concessions, according to people familiar with the matter.”
USMCA on Course for Ratification in 2020
Natalie Andrews, William Mauldin and Anthony Harrup reported yesterday at The Wall Street Journal Online that, “A new U.S. trade deal with Mexico and Canada gained backing from House Democrats, setting the agreement on course for likely ratification by Congress in 2020 and marking a victory for President Trump after months of negotiations to modify it.”
African Swine Fever Roils Markets, as Food Prices Increase Amid Supply Concerns
Bloomberg News reported last week that, “China’s hog population has stopped shrinking and is starting to rise, after months of decline because of African swine fever, and the recovery should keep pork prices in check, a senior agriculture ministry official said.”
Farm Purchases Still an Issue in U.S., China Talks; China Waives Tariffs on Some U.S. Soybeans and Pork
Late last week, Wall Street Journal writers Grace Zhu, Eva Dou and Bob Davis reported that, “China’s trade negotiations with the U.S. remain on track, Beijing said, offering official reassurance after tensions flared between the world’s two biggest economies over human-rights issues in China.”
Trade War Percolates on Multiple Fronts, But President in No Rush on China Deal
On Monday, Financial Times writers James Politi, Bryan Harris and Benedict Mander reported that, “Donald Trump will reimpose tariffs on imports of steel and aluminium from Brazil and Argentina after accusing the countries of a ‘massive devaluation’ of their currencies that hurt US farmers. The move — which was announced by Mr Trump on Twitter on Monday — sharply escalates trade tensions with the two struggling Latin American economies as they build closer ties with China.”
2019 Farm Sector Income Forecast, November
The USDA’s Economic Research Service (ERS) indicated on Wednesday that, “Net farm income, a broad measure of profits, is forecast to increase $8.5 billion (10.2 percent) from 2018 to $92.5 billion in 2019. Net cash farm income is forecast to increase $15.5 billion (15.0 percent) to $119.0 billion.”
Federal Reserve: Observations on the Ag Economy- November 2019
Last week, the Federal Reserve Board released its November 2019 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.
USDA Agricultural Trade Outlook- FY20 Export Forecast Increased
On Monday, the USDA released its Outlook for U.S. Agricultural Trade, a quarterly report from the Department’s Foreign Agricultural Service (FAS) and Economic Research Service (ERS). Today’s update includes highlights from the report, which was coordinated by Kamron Daugherty and Hui Jiang.
African Swine Fever Continuing to Impact U.S. Pork Exports and World Protein Markets
Earlier this month, in its monthly Livestock, Dairy and Poultry Outlook, USDA’s Economic Research Service (ERS) explained that, “U.S. trade data through September indicate that in the first three quarters of 2019 total exports of red meat and poultry increased 1.1 percent. However, driven by a large increase in expected fourth-quarter shipments, exports for the year are forecast to increase more than 3 percent compared with 2018, followed by an increase in 2020 of about 7 percent.”
Propane Supply Pressures Amid Late Harvest, Add to Unsettling Farm Economic Indicators
DTN writer Russ Quinn reported on Friday that, “As if the 2019 growing season didn’t have enough weather challenges, corn harvest has come to a complete halt for some farmers as propane for crop drying has been hard to secure. Increased demand nationwide due to extremely cold weather is limiting supplies available for drying crops.”
As Phase One Talks Continue, China Purchases Some U.S. Farm Products, While USDA Announced a Second Tranche of MFP Payments
Last week, Financial Times writer James Politi reported that, “President Donald Trump threatened a new escalation of the trade war with China, saying US tariffs on Chinese goods would be ‘raised very substantially’ if no truce was reached with officials in Beijing.”
Federal Reserve Ag Credit Surveys- 2019 Third Quarter Farm Economy Conditions
Last week, the Federal Reserve Banks of Chicago, St. Louis, Kansas City and Minneapolis released updates regarding farm income, farmland values and agricultural credit conditions from the third quarter of 2019. And earlier this year, the Federal Reserve Bank of Dallas released its Agricultural Survey for the third quarter of 2019. Today’s update highlights core findings from the Fed reports.
Wet Spring and Fall Complicating 2019 Harvest, and Could Impact 2020 Planting- Compounding Difficulties
Grace Zaplatynsky reported on Friday at the Globe Gazette (Mason City, Iowa) Online that, “This year has not been the greatest year for farmers with the soaked spring and now the cold and early snow in fall.”
Roll Back of Tariffs Stymie Phase One Trade Talks with China
Josh Zumbrun, William Mauldin and Chao Deng reported on the front page of Friday’s Wall Street Journal that, “Beijing’s announcement Thursday that the U.S. and China have mutually agreed to roll back tariffs as part of a ‘phase one’ trade accord lifted financial markets, but questions remained over how much ground—if any —the Trump administration had agreed to give.”
China “Scouring the World for Meat” as African Swine Fever Impacts Protein Markets
Bloomberg News reported last week that, “Tang Jie, who works on a pig farm, says he used to get pork from the wet market near his home every day. But he hasn’t bought any in two months. And his favorite dish, stewed pork ribs with lotus root, has been cut from the menu at his local restaurant.”
Corn, Soybean Harvest Slowest Since 2009- Capping Off Difficult Growing Year, Propane Supply a Concern
Late last month, Des Moines Register writer Donnelle Eller reported that, “Rain has slowed the harvest across the state in recent days. National Weather Service data for Des Moines showed that central Iowa on [October 23rd] matched the October rainfall record of 7.29 inches, set in 1941. Any more rain in the remaining eight days of the month would set a new record — a landmark in a year that already is one of the wettest in recorded Iowa history.”
USDA Baseline Background, Outlook, and Recent Projections
Last week, the USDA’s Economic Research Service (ERS) released a report discussing the USDA’s baseline, while the USDA’s Office of the Chief Economist (OCE) released selected tables from the Department’s Agricultural Projections to 2029. Today’s update highlights aspects from both the ERS report, and the OCE projections that focused on soybeans and corn.
China’s Ag Import Capacity Considered as Phase One Trade Talks Continue
Reuters writers Heather Timmons and Hallie Gu reported last week that, “U.S. President Donald Trump’s demand that Beijing commit to big purchases of American farm products has become a major sticking point in talks to end the Sino-U.S. trade war, according to several people briefed on the negotiations.”