An article at Politico on Thursday indicated that bipartisan negotiations over the Farm Bill had stalled due to issues surrounding the nutrition title of the new measure. More specifically, the Politico article stated that, “Democrats are revolting to potential changes to the Supplemental Nutrition Assistance Program, or SNAP, still commonly known as food stamps.” Also on Thursday, USDA’s Economic Research Service (ERS) released a detailed annual report that explored fiscal year 2017 federal data related to USDA nutrition programs, including SNAP. Today’s update looks at this ERS report in more detail, and also touches briefly on a SNAP related report released last week by the Center on Budget and Policy Priorities.
Farm Policy News
Farm Bill: SNAP Issues Hamper Timeline
Farm Bill issues related to the Supplemental Nutrition Assistance Program (SNAP- food stamps) appear to be hampering progress on the measure this week. Today’s update highlights recent news items that discuss the current impasse over SNAP provisions that are currently being discussed.
FAPRI Baseline: Farmers Still Caught in Economic Squeeze
A news release last week from the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri indicated that, “The latest analysis of national and global agricultural trends from the University of Missouri indicates little change in net farm income this year and a slight increase in 2019. However, even with modest projected increases in commodity prices in 2019, net farm income is expected to remain far below the record level set in 2013. Good news in the report includes strong demand for meat, which offset downward pressure on prices from increased production last year.”
New U.S. Tariffs Ramp-Up Fear of Ag Trade Retaliation; Soybean Growers Especially Worried
On Thursday, President Trump implemented tariffs on steel and aluminum, an action that had been anticipated since last week. Today’s update explores recent news items that highlight the potential negative impact the executive branch action could have on the U.S. farm sector. Although Canada and Mexico were exempt from the new tariffs, if other countries, particularly China, take retaliatory trade measures based on U.S. trade policy, negative short-term and long-term impacts could be expected for U.S. farmers.
Federal Reserve: Observations on the Ag Economy- February ’18
On Wednesday, the Federal Reserve Board released its February 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.
Trade Complications: President Signals Steel and Aluminum Tariffs Bargaining Chips in NAFTA Renegotiations
Wall Street Journal writer William Mauldin reported on Monday that, “President Donald Trump on Monday sought to use his threat to slap tariffs on steel and aluminum imports as leverage to extract concessions from North American trading partners, while his party’s congressional leaders worked to derail a proposal that they said could spark a trade war.”
Trade Retaliation Measures Could Hurt U.S. Farm Sector
A FarmPolicyNews update last month discussed executive branch implementation of U.S. import tariffs on solar panels and washing machines, as well as the possibility of future implementation of import barriers on steel and aluminum. That update also included a look at the potential of retaliatory measures, particularly by China, that could have a negative impact on U.S. agricultural exports and farm income. On Thursday, President Trump signaled that he plans to levy the tariffs on steel and aluminum imports soon. Today’s update looks at recent news items that highlight the negative impact trade retaliation measures could have on U.S. agriculture if the President follows through on his import tariff promise.
Agricultural Economy: Land Values, Value of Production, and Number of Farms
Today’s update looks briefly at recent publications from the Federal Reserve Bank of Minneapolis, and the USDA’s National Agricultural Statistics Service. These reports give additional insight into the state of the U.S. agricultural economy by providing information on agricultural credit conditions and land values, the value of agricultural production, and the number of farms in the U.S.
USDA-ERS Report: Farmland Values, 2000-2016
Today’s update looks briefly at farmland values in the United States, with a specific focus on a recent report from USDA’s Economic Research Service (ERS) that examined farmland values from 2000 to 2016. The ERS report noted that, “The value of farm real estate accounts for over 80 percent of the value of farm-sector assets and is an important indicator of the sector.”
USDA Trade Data: 2017 Calendar Year Highlights; Outlook for 2018 (Corn, Soybeans)
Today’s update looks at recent USDA trade highlights from calendar year 2017, and then turns to USDA’s export projections for corn and soybeans in the 2018-19 marketing year.
The 2018 Outlook for U.S. Agriculture From USDA’s Chief Economist
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.
Federal Reserve Ag Credit Surveys- 2017 Fourth Quarter Farm Economy Conditions in the Midwest
On Thursday, the Federal Reserve Banks of Chicago and Kansas City each released updates regarding farm income, farmland values and agricultural credit conditions from the fourth quarter of 2017. The Federal Reserve Bank of St. Louis issued a similar update earlier this month. Today’s update highlights core findings from the three reports.
Farm Groups Concerned About Additional U.S. Trade Restrictions- China Agricultural Retaliation
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.
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.”