As policy observers anticipate a meeting later this month between President Trump and China’s President Xi Jinping at the Group of 20 summit in Buenos Aires, recent news items continue to highlight the adverse impacts ongoing trade disputes are having on some sectors of the U.S. agricultural economy. The trade war is also providing economic incentives for robust Chinese investment in its domestic agricultural production.
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.
Minneapolis Fed: Chapter 12 Bankruptcies on the Rise
In addition to the melancholy agricultural outlook contained in recent Federal Reserve District agricultural surveys, an update last week from the Federal Reserve Bank of Minneapolis pointed to troubling data regarding Chapter 12 Bankruptcies in the District. In addition, recent news articles have also discussed some variables that could impact the state of the U.S. agricultural economy as the 2018 harvest draws to an end.
Federal Reserve Ag Credit Surveys- 2018 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 2018. Today’s update highlights core findings from Thursday’s reports.
Looking For Some Certainty, Farmers Await Farm Bill Passage
Reuters writer Humeyra Pamuk reported last week that, “U.S. soybean farmer Mike Schlosser does not expect President Donald Trump’s trade war with China, the single biggest headwind to his business, to end any time soon. But he is among many in farm country who expect at least some good news this year – in the form of a new Farm Bill.”
Farmers Seek Additional Markets for Soy, While Fears Grow for Lasting Trade Impacts
Reuters writers P.J. Huffstutter and Karl Plume reported Wednesday that, “Clouds crowded the Illinois sky as Nick Harre walked away from his combine at the peak of harvest to join four fellow farmers in greeting some unlikely visitors.
USDA Reports and Recent News Articles Shed Light on U.S. Soybean Export Variables
Updated monthly data last week from the U.S. Department of Agriculture provided additional insight into how the ongoing U.S. trade dispute with China is impacting the soybean market. Today’s update looks briefly at portions of the USDA data, as well as recent news articles that have discussed U.S. agricultural export variables, and ongoing trade issues with China.
Post Election: Farm Bill Perspective From House Ag Committee Chair-elect Collin Peterson
House Ag Committee Chair-elect Collin Peterson (D., Minn.) was a guest on Thursday’s “Adams on Agriculture” radio show with Mike Adams. Today’s update includes perspective on the status of the Farm Bill legislation from Rep. Peterson, as well as other recent news items discussing the Conference Committee’s progress.
U.S. Agricultural Exports Up From a Year Ago, But Chinese Tariffs Dim Soybean Prospects
In its latest quarterly forecast for U.S. agricultural trade, USDA indicated that, “For fiscal 2018, the [agricultural export] forecast of $144.0 billion is an increase of $1.5 billion from the previous forecast in May, largely due to higher corn, cotton, and soybean meal exports.”
Effects of Ag Tariffs Ripple Beyond Exports
Recent news articles demonstrate that tariffs on U.S. agricultural commodities are having an impact not only on the quantity of U.S. goods exported to China, but also the flow of some agricultural products within the U.S., and 2019 acreage allocation decisions by farmers. Meanwhile, a recent Wall Street Journal article reported that, “President Trump said the U.S. is getting much closer to a trade deal with China, a sign of optimism ahead of the Group of 20 leaders summit in Argentina later this month.”
USDA Agricultural Projections Show Decreased Soybean Acres
On Friday, the USDA’s Office of the Chief Economist (OCE) released selected tables prepared for the Department’s upcoming Agricultural Baseline Projections report. In part, the tables demonstrated that, “USDA estimated 82.5 million acres of soybean plantings for the spring of 2019, down from 89.1 million acres this year.”
Additional U.S. Trade Tariffs Possible as Ag Markets Absorb Impacts
Trade tensions between the U.S. and China persist, while Chinese tariffs on U.S. commodities continue to roil markets. Despite a variety of impeding economic variables, a news article notes that the current ag economy is sturdier than when the 1980s farm crisis unfolded. Meanwhile, export competitors move forward with a Trans Pacific Partnership agreement, while the benefits of the new USMCA may be overshadowed by ongoing tariff disputes.
ERS Report- “An Exploration of Crop Markets: A Deeper Look Into the USDA Crop Baseline Projections.”
On Monday, the USDA’s Economic Research Service (ERS) released a report titled, “An Exploration of Crop Markets: A Deeper Look Into the USDA Crop Baseline Projections,” which discussed the February 2018 USDA long-term crop projections in greater detail. Today’s update highlights aspects of the report relating specifically to corn and soybeans.
Tariff Disruptions Persist, While Trade Talks with China Seem Uncertain
Recent news items continue to discuss the impacts of trade tariffs on agricultural commodities, including soybeans, dairy products, and pork. Meanwhile, separate articles have focused on executive branch trade policy perspective with respect to China, as well as as the administration’s view on potential trade mitigation payments for 2019.
Federal Reserve: Observations on the Ag Economy- October 2018
On Wednesday, the Federal Reserve Board released its October 2018 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.
Kansas City Fed Update: Ag Lending, Farmland Values, and Farm Income
Nathan Kauffman and Ty Kreitman indicated in a recent update from the Federal Reserve Bank of Kansas City (“Large-Scale Financing Drives Ag Lending Activity Higher”) that, “Alongside persistently low agricultural commodity prices, bankers throughout the country expected farm income to decline in the coming months. Despite the ongoing weaknesses in farm income and agricultural credit conditions, however, delinquency rates on farm loans remained low and the performance of agricultural banks remained sound.”
Trade War May Be More Than “a Short-Term Hiccup” for Agriculture
Recent news articles continue to highlight the impact that the ongoing trade war between the U.S. and China is having on the agricultural economy. Today’s update looks at news items that discuss trade repercussions for pork and soybean farmers.
After Updated KORUS and USMCA, U.S. Trade Agenda Continues
After recently signing a new KORUS (United States-Republic of Korea) Trade Agreement, and reaching an agreement on a revised North American Free Trade Agreement with Canada and Mexico, the U.S. Trade Representative’s Office signaled this week that the U.S. will start trade talks with Japan, the EU and the U.K. soon.
Expiration of the 2014 Farm Bill, CRS Report
A report last week from the Congressional Research Service stated that, “The timing and consequences of expiration vary by program across the breadth of the farm bill. There are two principal expiration dates: September 30 and December 31. The 2014 farm bill generally expires either at the end of FY2018 (September 30, 2018), or with the 2018 crop year. Crop years vary by commodity, but the first to be affected by a new crop year is dairy, whose 2018 crop year ends on December 31, 2018.”
U.S. and China Plan Talks in November, While Soybean Trade Flows Adjust
News reports indicate that President Trump and Chinese Leader Xi Jinping plan to meet in November, in what could be an opportunity for the two leaders to discuss trade issues. Meanwhile, a recent USDA report, and current news articles, continue to highlight how the ongoing Chinese trade tariffs are impacting the international trade flow of soybeans.
President Trump Opens Door to Increased Ethanol Use
On Tuesday, Bloomberg writers Jennifer A Dlouhy and Mario Parker reported that, “President Donald Trump is moving to clamp down on a scandal-plagued $2.25 billion market in biofuel compliance credits, embracing reforms that could block Wall Street banks from trading them…[and]…at the same time, Trump will order the EPA to take steps to enable the year-round sale of gasoline containing as much as 15 percent ethanol.”