Agricultural Economy

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.”

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.”

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.

In an update last week from the Federal Reserve Bank of Kansas City (“Farm Lending Slows but Remains High”) Cortney Cowley and Ty Kreitman stated that, “Growth in farm lending activity slowed in the third quarter of 2019;” but, “Despite a slowdown in the pace of debt accumulation, weaknesses in the sector persisted, continuing to pressure farm cash flows and agricultural credit conditions.”

On Wednesday, the Federal Reserve Board released its October 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.

Late last week, Bloomberg writers Brian K Sullivan and Ashley Robinson reported that, “A large snowfall is set to sweep out of the Rocky Mountains later this week, bringing snow by the foot across the Dakotas, slowing wheat harvests and ending any chance for still-maturing corn crops to flourish.”

Last week, the Federal Reserve Board released its August 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.

The USDA’s Economic Research Service (ERS) indicated on Friday that, “Net farm income, a broad measure of profits, is forecast to increase $4.0 billion (4.8 percent) from 2018 to $88.0 billion in 2019. Net cash farm income is forecast to increase $7.6 billion (7.3 percent) to $112.6 billion.”

Wall Street Journal writer Lauren Silva Laughlin reported earlier this month that, “Losses are popping up in farmers’ income statements and the pain can be seen in the share prices of the companies that depend on them. After a challenging planting season due to wet weather, trade uncertainty has ravaged farm profitability. Flooding throughout the spring caused what JPMorgan Chase deemed a ‘planting season from hell.'”

On Thursday, the Federal Reserve Bank of Chicago released a report providing an outlook on farmland values and agricultural credit conditions for the second quarter of 2019.  Recall that other Federal Reserve Districts released similar reports last week.  A summary of Federal Reserve District agricultural land value and credit reports from the first quarter of 2019 can be found here.  Meanwhile, recent updates from USDA’s National Agricultural Statistics Service and Purdue University have also provided additional perspective on farmland values.

This week, the Federal Reserve Banks of St. Louis, Kansas City and Minneapolis released updates regarding farm income, farmland values and agricultural credit conditions from the second quarter of 2019.  And earlier this year, the Federal Reserve Bank of Dallas released its Agricultural Survey for the second quarter of 2019.  Today’s update highlights core findings from the Fed reports.

Recent news items have highlighted variables associated with the agricultural economy, including: loan repayment rates, debt levels, bankruptcy filings and agricultural production expenses.  Today’s update includes a brief recap of some of these articles and reports.

Nathan Kauffman and Ty Kreitman indicated in a recent update from the Federal Reserve Bank of Kansas City (“Large Loans Drive Further Increases in Farm Lending”) that, “Growth in the average size of farm operating loans boosted agricultural lending in the second quarter of 2019.”

On Wednesday, the Federal Reserve Board released its July 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 week, the Food and Agriculture Organization of the United Nations (FAO) released a report titled, “The State of Food Security and Nutrition in the World 2019.”  Today’s update includes highlights from the FAO report.

A news release on Monday from the Food and Agriculture Organization of the United Nations stated that, “Global demand for agricultural products is projected to grow by 15 percent over the coming decade, while agricultural productivity growth is expected to increase slightly faster, causing inflation-adjusted prices of the major agricultural commodities to remain at or below their current levels, according to an annual report by the Organisation for Economic Co-operation and Development and the UN’s Food and Agriculture Organization.”

The challenges presented by the extraordinarily bad weather this spring, which have already clouded the production outlook for 2019, continue to plague many farmers as the summer growing season unfolds across the Corn Belt.  Meanwhile, Saturday marked the one year anniversary of China’s imposition of tariffs on U.S. agricultural products.  Aid from the federal government has helped dull the tariff’s sting, but trade issues continue to linger for producers, with many concerned about the long-term impacts of the ongoing trade war.  Today’s update looks at recent news items that highlight these issues in more detail.

Bill Northey, the USDA Under Secretary for Farm Production and Conservation, was a guest on Friday’s “Adams on Agriculture” radio show with Mike Adams.  Today’s update highlights the parts of Friday’s discussion that focused on prevent plant acres and market facilitation program payments.

Today’s update highlights recent news items that discuss the value of farmland in Iowa, Nebraska, and more broadly in the Corn Belt.

Late last week, the U.S. Department of Agriculture’s Economic Research Service (ERS) released a report (“Interdependence of China, United States, and Brazil in Soybean Trade,” by Fred Gale, Constanza Valdes, and Mark Ash) that discussed “factors driving China’s imports of soybeans and production in Brazil and the United States, price dynamics, and market adjustments to China’s retaliatory tariff on U.S. soybeans.” Today’s update includes highlights from the ERS report.