Bloomberg News reported this week that, “China is considering making some purchases of U.S. agricultural goods by early March as a way to show it’s still committed to its phase one trade deal, according to people familiar with the matter.”
Farm Policy News
Federal Reserve Ag Credit Surveys- 2019 Fourth Quarter Farm Economy Conditions
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.
USDA Agricultural Projections to 2029- Focus on Corn, Soybeans
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.
Coronavirus Cases Increase, But More U.S. Soybean Sales Expected
Wall Street Journal writers Wenxin Fan, Natasha Khan, and Chao Deng reported this week that, “New cases of the coronavirus rose sharply after Chinese authorities changed the criteria for diagnosing the illness, raising questions about how soon the outbreak will peak.”
2020 Farm Sector Income Forecast, February
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.”
China Reassures U.S. on Phase One Trade Purchase Goals
Bloomberg writer Peggy Collins reported late last week that, “China’s leader Xi Jinping reassured U.S. President Donald Trump in a phone call that Beijing would meet purchase goals outlined in the recent trade deal between the countries — despite the impact of the coronavirus on the Asian nation, White House economic adviser Larry Kudlow said Friday.”
China to Cut Tariffs on Some U.S. Imports as Coronavirus Worries Linger
Wall Street Journal writer Lingling Wei reported on Thursday that, “China said it would slash tariffs on $75 billion of U.S. imports in half as part of its efforts to implement a recently signed trade agreement with Washington.”
“Export Boom” From Phase One Deal Potentially Delayed by Coronavirus
Bloomberg writer Ana Monteiro reported on Tuesday that, “The ‘export boom’ from the U.S.’s trade deal with China will be delayed because of the coronavirus outbreak, but the economic impact ‘is going to be minimal,’ White House economic adviser Larry Kudlow said.”
Sec. Perdue Highlights EU Ag Trade Issues
Bloomberg writer Jonathan Stearns reported last week that, “Agriculture Secretary Sonny Perdue became the latest American official to face European Union complaints about U.S. threats to global trade rules and punitive tariffs on EU farm goods.”
After U.S., China Phase One Deal, Coronavirus Adds Additional Wrinkle
Reuters writers Hallie Gu, Muyu Xu and Tony Munroe reported last week that, “China’s imports of U.S. soybeans surged in December from a year earlier, data showed on Friday, as China ramped up purchases during a thaw in the two country’s trade war.”
President Trump Signs the USMCA
New York Times writers Ana Swanson and Emily Cochrane reported on Wednesday that, “President Trump signed the revised North American Free Trade Agreement into law on Wednesday, fulfilling a key campaign promise and bringing more than two years of tumultuous negotiations over the continent’s trade rules to a close.”
Federal Appellate Court Decision, and GAO Review Highlight Biofuel Waiver Issues
In separate developments this month, a federal appellate court and the U.S. Government Accountability Office, have weighed in with actions that could impact how biofuel waivers that exempt oil refineries from Renewable Fuel Standard requirements are granted. Today’s update looks briefly at each of these issues.
Costs of Corn and Soybean Production in 2020, ISU Report
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.”
U.S. Agricultural Trade Developments: China, the European Union, and India
Trade issues continue to be an important executive branch focal point; today’s update takes a closer look at recent news items regarding agricultural trade with China, the European Union and India.
The Navigable Waters Protection Rule – A New Definition of WOTUS
A news release from the U.S. Environmental Protection Agency (EPA) on Thursday stated that, “Today, at an event at the National Association of Home Builders International Builders’ Show in Las Vegas, EPA Administrator Andrew Wheeler and Assistant Secretary of the Army for Civil Works R.D. James will announce a new, clear definition for ‘waters of the United States.'”
Kansas City Fed: Farm Lending Declines For a Second Consecutive Quarter
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.”
Uncertainty Lingers Regarding Chinese Purchases of U.S. Farm Goods
Bloomberg writers Mike Dorning and Michael Hirtzer reported last week that, “President Donald Trump’s phase-one trade deal with China offers the promise of more overseas sales for American farmers, but the impact of the agreement remains unclear.”
Federal Reserve: Observations on the Ag Economy- January 2020
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.
Senate Passes USMCA, Providing Reassurance and Certainty to Farmers
Wall Street Journal writer William Mauldin reported on Thursday that, “The U.S. Senate easily passed an overhaul of North America’s trade rules on Thursday, sending a major Trump administration priority to the president’s desk.”
U.S., China Sign Phase One Trade Deal- Agricultural Purchases Included
Financial Times writer James Politi reported on Wednesday that, “The US and China have signed an agreement to pause the trade war that has weighed on the global economy for nearly two years, while leaving in place tariffs on hundreds of billions of dollars of Chinese imports.”