Following the implementation of U.S. import tariffs on solar panels and washing machines, more recent news regarding potential executive branch trade barriers imposed on steel and aluminum imports have caused concern among some American agricultural groups. China is a leading producer of solar panels and steel, and is also a key export destination for U.S. agricultural exports. As U.S. farm income potentially languishes for another year, export markets have become increasingly important to the value of U.S. crop production. Some observers have cautioned that agricultural products could be targeted by China in retaliation for additional U.S. trade restrictions.
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.
USDA Releases 10-Year Agricultural Projections- Focus on Corn, Soybeans
On Thursday, the U.S. Department of Agriculture released its 10-year projections for the food and agricultural sector. The report noted that, “Over the next several years, the agricultural sector continues to adjust to lower prices for most farm commodities. Planted acreage drops slightly despite continued low energy costs. However, marked shifts occur – most notably strong global demand for soybeans is expected to induce soybean plantings that exceed corn acreage. Lower feed costs and continued strong global demand provide economic incentives for expansion in the livestock sector.” Today’s update highlights aspects of the report that focused on corn and soybeans.
In Budget Proposal, White House Seeks Cuts To Crop Insurance and SNAP
On Monday, the Trump administration released its budget proposal for fiscal year 2019. Like last year, the budget outline contained proposed cuts to crop insurance and the SNAP program. Today’s update looks at these budget ideas in greater detail.
Cottonseed Included in Title I of the Farm Bill
A budget agreement reached last week included language that paves the way for cotton producers to participate in Title I commodity programs of the Farm Bill. After previous unsuccessful attempts to facilitate this change to the 2014 Farm Bill, the new provision allows cottonseed to be an eligible program commodity effective with the 2018 crop year.
2018 U.S. Farm Income Forecast Released
The U.S. Department of Agriculture’s Economic Research Service (ERS) indicated on Wednesday that, “Net farm income, a broad measure of profits, is forecast to decrease $4.3 billion (6.7 percent) to $59.5 billion in 2018, which would be the lowest level in nominal terms since 2006.”
House Ag Committee Hearing with Sec. Perdue: Trade Issues
Secretary of Agriculture Sonny Perdue testified before the House Agriculture Committee on Tuesday morning at a hearing on the “State of the Rural Economy.” Recall that back in May, shortly after his confirmation, Sec. Perdue also provided lawmakers on the Committee with an update on rural economic issues. Trade issues with China and the ongoing renegotiation of the North American Free Trade Agreement (NAFTA) were among the key concerns that emerged on Tuesday.
Kansas City Fed: Ag Lending and Interest Expenses Increase for Farmers
An update on Friday from the Federal Reserve Bank of Kansas City (“Agricultural Lending Increases, As Do Interest Expenses for Farmers,” by Cortney Cowley and John McCoy) stated that, “Lending at agricultural banks increased sharply in the fourth quarter, after appearing to stabilize in previous quarters. Large loans drove the increase in farm lending, which may heighten concerns about cash flow in 2018 as interest rates have continued to rise steadily.”
If a China-U.S. Trade Dispute Emerges, Could Soybean Exports Be Affected?
Last week, a Bloomberg news article stated that, “Commodities would be particularly exposed if U.S. President Donald Trump’s decision to impose tariffs on foreign solar panels and washing machines sparks a tit-for-tat trade war with nations around the world…If China wanted to hit back, soybeans could be a weapon.”
NAFTA Talks Moving “Slowly,” President Floats TPP Consideration
Financial Times writer Shawn Donnan reported on Monday that, “Talks to renegotiate the North American Free Trade Agreement are moving too slowly, Donald Trump’s trade tsar complained on Monday as he rejected a Canadian proposal to rethink the rules governing the auto trade on the continent.”
Focus on SNAP, the Largest Farm Bill Program
Today’s update looks briefly at the SNAP (food stamps) program within the Farm Bill. The USDA’s Economic Research Service (ERS) released a report on Thursday that examined the program in detail. This update looks at core points from the ERS report with particular focus on issues relating to “block granting” the program to States, and program work requirements.
Trade Update: Trans-Pacific Partnership (TPP), China, and NAFTA
Jacob M. Schlesinger reported on Tuesday at The Wall Street Journal Online that, “Eleven Pacific Rim nations agreed to forge a new trade bloc [TPP] that excludes the U.S. on Tuesday, as President Donald Trump signed an order to block certain cheap Asian imports [Chinese makers of solar panels and South Korean producers of washing machines], illustrating the battle lines of a new global trade climate.”
Ag Economy: 2018 Outlook from CoBank; and Farmland Values
CoBank recently released a new report that explored a variety of issues that will impact the U.S. rural economy in 2018. In addition, recent newspaper articles have discussed reports relating to the value of U.S. farmland. This update briefly highlights core points from the CoBank report, and also looks at the new information on farmland values.
Farm Bill: Budget Impasse Could Impact Congressional To-Do List
Los Angeles Times writer Lisa Mascaro reported late last week that, “The federal government began shutting down early Saturday after a flurry of dramatic, last-minute negotiations failed to end the congressional deadlock over a spending bill before a midnight deadline.” However, a New York Times article from Sunday noted that, “The government shutdown will enter its third day. Senator Mitch McConnell, the majority leader, delayed a procedural vote on a stopgap spending bill until noon on Monday, as a bipartisan group of senators appeared to be inching toward a compromise.” The ongoing budget standoff could create increased uncertainty with respect to the Congressional to-do list, including the Farm Bill.
Federal Reserve: Observations on the Ag Economy- January ’18
On Wednesday, the Federal Reserve Board released its January 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 Ag Outlook- Robust Corn, Soybean Production Make Exports Increasingly Important
Cortney Cowley, an economist at the Federal Reserve Bank of Kansas City, indicated in an update last week (“As Winter Looms, Key Risks Keep Ag Outlook Cool”) that, “Following steep declines for three consecutive years, farm income was expected to stabilize in 2017 and beyond. In inflation-adjusted dollars, real net farm income was forecast to be relatively unchanged from 2016.”
USDA Trade Data Update: Focus on Soybeans and Grains
Today’s update provides a brief overview of updated USDA agricultural export data, with particular focus on soybeans and grains.
Farm Bill- Disaster Bill Seen as First Step, SNAP Concerns
An update posted on Tuesday at the National Sustainable Agriculture Coalition (NSAC) blog indicated that, “Less than two weeks into the new year, and Congress already has an incredibly full plate. Both the House and Senate return to work this week (the Senate has officially been back since last week), and will need to immediately dig in their massive to-do lists, not least of which include finalizing fiscal year (FY) 2018 appropriations legislation, preparing for the FY 2019 budget, and tackling the soon-to-expire 2014 Farm Bill.”
President Trump Delivers Remarks to Farm Bureau Members
President Donald Trump addressed the American Farm Bureau Federation’s (AFBF) 99th Annual Convention in Nashville, Tennessee on Monday. The President touched on a variety of issues, including tax reform, regulations, rural broadband, the Farm Bill, crop insurance, and trade. This post highlights some of the key points that the President made in his remarks to the AFBF Members.
NAFTA- Recent Developments as President Trump Addresses AFBF Members on Monday
President Donald Trump will be in Nashville, Tennessee on Monday to speak at the American Farm Bureau Federation’s (AFBF) 99th Annual Convention. The AFBF noted recently that, “After three consecutive years of decline in farm sector profits, President Trump will speak to Farm Bureau members during a period of prolonged economic challenge across farm country.” In fiscal year 2017, the U.S. exported $140.5 billion worth of agricultural products; and, the U.S. Department of Agriculture explained recently that, “Exports are responsible for 20 percent of U.S. farm income, also driving rural economic activity and supporting more than one million American jobs both on and off the farm.” AFBF members will be keenly interested in any remarks the President makes regarding trade policy, and the North American Free Trade Agreement (NAFTA) on Monday. With this in mind, today’s update focuses on recent NAFTA developments and agriculture.
Federal Reserve Bank of Dallas Ag Credit Survey- Fourth Quarter 2017
Earlier this week, the Federal Reserve Bank of Dallas released its Agricultural Credit Survey for the fourth quarter of 2017. The Fed update indicated that, “Demand for agricultural loans overall continued to decrease for a ninth consecutive quarter. Loan renewals and extensions continued to increase, while the rate of loan repayment stabilized after falling last quarter.”