Agricultural Economy

Bloomberg writer Brian K Sullivan reported on Friday that, “For the second year in a row, much of the U.S. is primed to suffer multi-billion dollar flood losses, with farmers already steeling themselves for planting delays.”

Speaking on Thursday at USDA’s Agricultural Outlook Forum in Arlington, Virginia, USDA Chief Economist Robert C. Johansson provided a broad outlook for U.S. agriculture.  Today’s update provides an overview of key aspects of Dr. Johansson’s presentation.

Last week, the Federal Reserve Banks of Chicago and Kansas City released updates regarding farm income, farmland values and agricultural credit conditions from the fourth quarter of 2019.  And earlier this year, the Federal Reserve Bank of Dallas released its Agricultural Survey for the fourth quarter of 2019.  Meanwhile, a recent update posted at the Federal Reserve Bank of St. Louis, which has also historically released quarterly farm credit conditions, stated that, “The St. Louis Fed’s Agricultural Finance Monitor has been discontinued.”  Today’s update highlights core findings from the Fed reports.

On Friday, the U.S. Department of Agriculture released its 10-year projections for the food and agricultural sector. Today’s update highlights aspects of the report that focused on corn and soybeans.

The USDA’s Economic Research Service (ERS) indicated on Wednesday that, “Net cash farm income is forecast to decrease $10.9 billion (9.0 percent) to $109.6 billion in 2020, relative to the 2019 forecast. Net farm income, a broader measure of profits, is forecast to increase $3.1 billion (3.3 percent) from 2019 to $96.7 billion in 2020.”

In a recent update from Iowa State University Extension (“Estimating costs of crop production vital for 2020
farm businesses”), Alejandro Plastina explained that, “Thin profit margins in corn and soybean production have become the norm over the past five years, increasing the need for proper budgeting and marketing strategies among crop producers.”

In an update last week from the Federal Reserve Bank of Kansas City (“Farm Lending Declines at End of 2019”), Nathan Kauffman stated that, “The volume of agricultural lending at commercial banks remained elevated, but declined for a second consecutive quarter. Total non-real estate farm loans decreased about 12 percent in the fourth quarter and declined over consecutive quarters for the first time since early 2017.”

Last week, the Federal Reserve Board released its January 2020 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.

Last week, Financial Times writers Emiko Terazono, Andres Schipani and Jamie Smyth reported that, “China’s African swine fever epidemic has dramatically reshaped the global meat market and its trade patterns in the 18 months since the outbreak was first officially acknowledged.”

Last week, the Federal Reserve Bank of Dallas released its Agricultural Survey for the Fourth Quarter of 2019.

A recent report from USDA’s Foreign Agricultural Service (FAS) stated that, “Brazil is forecast to overtake the United States as the leading soybean producer in the world during the 2019/20 season.”

News articles continue to point to various market disruptions caused by the ongoing African Swine Fever outbreak in Asia and beyond.  Today’s update looks at a few of these items in more detail.

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.”

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.”

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.”

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.

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.”

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.”

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.

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.”