Last week, USDA updated portions of its monthly agricultural trade data. Despite some positive indications, news reports demonstrate that concerns over the renegotiation of the North American Free Trade Agreement (NAFTA) persist in both Mexico and the U.S. agricultural sector.
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.
Survey Sheds Light on Farm Profitability, While Producers Cut Costs
A news release on Tuesday from the American Bankers Association (ABA) stated that, “Eighty-two percent of agricultural lenders reported a decline in farm profitability in the last 12 months, according to a joint survey by the [ABA] and the Federal Agricultural Mortgage Corporation. Despite the continued decline, the survey of more than 580 agricultural lenders revealed that the agricultural loan approval rate is 84 percent.”
Farm Bill: “Technical Adjustments,” and “Tweaks”
Jacqui Fatka reported on Friday at Farm Futures Online that, “House Agriculture Committee Chairman Mike Conaway, R-Texas, said [on October 25th] that the Congressional Budget Office (CBO) has sped up its analysis of farm bill provisions that the committee is considering. He told reporters that the committee is still on track to bring out a bill before the end of the year or early 2018.”
USDA- ERS: Opportunities for U.S. Ethanol Exports
A report earlier this month from USDA’s Economic Research Service (ERS) (“Global Ethanol Mandates: Opportunities for U.S. Exports of Ethanol and DDGS,” by Jayson Beckman and Getachew Nigatu) noted that, “The increased use of ethanol globally could provide strong and diverse export market opportunities for U.S. ethanol and ethanol byproducts.” Parts of the ERS report are highlighted in this update.
USDA-FAS Report: China and Biofuels
A recent GAIN (Global Agricultural Information Network) report by USDA’s Foreign Agricultural Service (FAS) took a closer look at important variables regarding biofuels and China. Today’s update includes some highlights from the report, which is available in its entirety here, “China- Biofuels Annual, ‘Growing Interest for Ethanol Brightens Prospects.'”
Corn Belt: “Hoping to Breakeven,” in a “Persistently Weak” Ag Economy
An article on the front page of Saturday’s Des Moines Register explored issues associated with corn and soybean production, prices, and farm profitability in Iowa. Meanwhile, the Federal Reserve Bank of Kansas City released a paper last week which noted that, “Lending at agricultural banks appeared to stabilize in the third quarter of 2017, but risks in the sector have remained alongside a persistently weak agricultural economy.” Today’s update includes highlights from these two current news items that shed additional light on the state of the Corn Belt farm economy.
After Pressure from Senators, Iowa Governor- Trump Administration Signals RFS Support
In late September, the Environmental Protection Agency (EPA) released a proposal to reduce the volume requirements for biodiesel for 2018 and 2019 under the Renewable Fuel Standard (RFS). However, on Thursday, in a letter to several senators, the EPA Administrator committed to at least maintain current blending requirements. Today’s update provides a brief timeline of some of the reaction by lawmakers, including Senator Chuck Grassley (R., Iowa), that transpired between the EPA proposal in September, to Thursday’s letter from EPA.
Federal Reserve: Observations on the Ag Economy- October ’17
On Wednesday, the Federal Reserve Board released its October 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.
NAFTA Renegotiation Talks Extended– U.S. Dairy Proposal Rejected
Ana Swanson reported on Tuesday at The New York Times Online that, “Until Tuesday, the North American Free Trade Agreement looked like it might be headed for a quick demise. Now, it could be headed for a slow, painful one. The United States, Canada and Mexico said on Tuesday that they would extend Nafta negotiations into next year, with the parties citing ‘significant conceptual gaps’ in how to rewrite the 1994 trade pact.”
USDA-FAS Report: China’s Meat and Poultry Import Forecast, 2018
On Thursday, the U.S. Department of Agriculture’s Foreign Agricultural Service (FAS) released its biannual “Livestock and Poultry: World Markets and Trade” report, which is published in April and October, and is “designed to give a snapshot of the current situation among the major players in world beef, pork, and broiler meat trade.” Today’s update provides a recap of some of the highlights from the FAS report, which was titled, “China’s Meat and Poultry Import Forecast 2018: Decline and Constrained Growth.”
NAFTA Renegotiation Continues- Pres. Trump, Sec. Perdue, Lawmakers Weigh In
William Mauldin reported on Wednesday at The Wall Street Journal Online that, “President Donald Trump, speaking alongside Canadian Prime Minister Justin Trudeau, opened the door to separate trade deals with Canada and Mexico to replace the North American Free Trade Agreement and repeated his warnings that the U.S. could withdraw from the pact.”
U.S. Agricultural Exports- Data Update from USDA
Last week, the U.S. Department of Agriculture updated its monthly agricultural trade data. Today’s update includes an overview of some observations from the data with a focus on corn, soybeans, wheat and livestock.
Senate Hearings- Trade, and Conservation Reserve Program Examined
On Thursday, the Senate Finance Committee held a hearing to consider three nominees for key trade positions, while the Senate Ag Committee questioned two nominees for Undersecretary posts at the USDA. Today’s update highlights some key points from the hearings, including issues related to agricultural trade and the Conservation Reserve Program.
Federal Reserve Bank of Dallas Ag Credit Survey- Third Quarter
Earlier this week, the Federal Reserve Bank of Dallas released its Agricultural Credit Survey for the third quarter of 2017. The Fed update indicated that, “Demand for agricultural loans overall decreased for the eighth consecutive quarter. Loan renewals and extensions continued to increase.”
Rural Economy: Farm Income, Manufacturing- Both Important Variables
The Bureau of Economic Analysis (BEA) indicated in a news release last week that, “State personal income grew 0.7 percent on average in the second quarter of 2017, after increasing 1.4 percent in the first quarter, according to estimates released [Tuesday] by [BEA].” However, the release added that, “Farm earnings declined for the nation and in every state in the second quarter and was the leading contributor to slow earnings growth in many states.”
Iowa State University- “Financial stress in Iowa farms: 2014-2016”
Iowa State University (ISU) Extension Economist Alejandro Plastina penned a recent article titled, “Financial Stress in Iowa Farms: 2014-2016.” Today’s update recaps some of the key findings from the ISU article.
Senate Farm Bill Hearing, Rural Development- Broadband Access, Opioid Epidemic Noted
On Thursday, the Senate Agriculture Committee held its ninth Farm Bill hearing where the panel turned its attention to rural development and energy programs. Recall that a House Agriculture Subcommittee explored similar issues back in March. Today’s update provides a brief overview of yesterday’s hearing with particular focus on rural broadband Internet access and the opioid epidemic, two issues that were raised by lawmakers.
“Drowning In Grain”- Reuters Special Report on the Global Grains Glut
Reuters writer Rod Nickel reported yesterday that, “On Canada’s fertile Prairies, dominated by the yellows and golds of canola and wheat, summers are too short to grow corn on a major scale. But Monsanto Co is working to develop what it hopes will be North America’s fastest-maturing corn, allowing farmers to grow more in Western Canada and other inhospitable climates, such as Ukraine…The question, amid historically high supplies and low grain prices, is whether the world really needs more corn.”
USDA-RMA Report: Analysis of the Federal Crop Insurance Portfolio
Last week, the USDA’s Risk Management Agency (RMA) released an analysis of the Federal crop insurance portfolio titled, “The Risk Management Safety Net: Market Penetration and Market Potential.” Today’s update recaps some of the key findings from the RMA report.
FAO Report: Global Hunger is on the Rise Again
An update on Friday from the Food and Agriculture Organization (FAO) of the United Nations indicated that, “After steadily declining for over a decade, global hunger is on the rise again, affecting 815 million people in 2016, or 11 percent of the global population, says a new edition of the annual United Nations report on world food security and nutrition released today. At the same time, multiple forms of malnutrition are threatening the health of millions worldwide.”