Executive branch policy action last week resulted in some very welcome good news for U.S. agriculture. Metal import tariffs on Canada and Mexico were lifted, improving the outlook for the USMCA Agreement, and a decision to apply U.S. tariffs on cars from the EU and Japan was postponed. Also last week, Secretary of Agriculture Sonny Perdue announced a breakthrough agreement opening additional U.S. beef exports to Japan. Nonetheless, recent news reports document that trade issues, particularly with China, continue to suppress the outlook for U.S. farmers.
Farm Policy News
U.S., China Trade Dispute Escalates, While Some Trade Aid Details Emerge
The U.S., China trade dispute escalated this week, weighing on some agricultural markets. Meanwhile, news reports indicate that the executive branch is working on additional trade aid for farmers negatively impacted by the ongoing dispute. Today’s update highlights these issues in more detail.
Federal Reserve Ag Credit Surveys- 2019 First Quarter Farm Economy Conditions
Last week, the Federal Reserve Banks of Chicago, St. Louis and Kansas City released updates regarding farm income, farmland values and agricultural credit conditions from the first quarter of 2019. And earlier this year, the Federal Reserve Bank of Dallas released its Agricultural Survey for the first quarter of 2019. Today’s update highlights core findings from the Fed reports.
U.S., China at Trade Impasse- President Trump Offers Policy Help for Farmers
Last week, the United States made good on a threat to increase trade tariffs on China. Some agricultural markets roiled on the news, and President Trump offered policy assistance to U.S. farmers in a series of Tweets on Friday morning. Today’s update looks at these issues in greater detail.
House Agriculture Subcommittee Hearing: “Reviewing the State of the Farm Economy”
On Thursday, the House Agriculture Subcommittee on General Farm Commodities and Risk Management held a hearing titled, “Reviewing the State of the Farm Economy.” Today’s updates provides a brief recap of some of the issues that were discussed at the Subcommittee meeting.
President Trump Threatens More Tariffs on Chinese Goods- Implementation Planned for Friday
Reuters writers Jeff Mason and David Shepardson reported this week that, “President Donald Trump dramatically increased pressure on China to reach a trade deal by announcing on Sunday he would hike U.S. tariffs on $200 billion worth of Chinese goods this week and target hundreds of billions more soon.”
Kansas City Fed: Ag Banks Make Adjustments
An update last month from the Federal Reserve Bank of Kansas City (“Ag Banks Make Adjustments as Lending Remains Elevated,” by Cortney Cowley and Ty Kreitman) stated that, “According to the National Survey of Terms of Lending to Farmers, non-real estate lending continued to increase at a moderate pace in the first quarter. The volume of non-real estate loans increased 9 percent from a year ago. Although the volume of loans to finance operating expenses remained relatively steady, volumes for livestock loans and loans to finance machinery and equipment increased.”
Trade Process Moves Forward on China, USMCA, and Japan, as Farmers Feel Strain
Today’s update briefly reviews recent news articles highlighting executive branch action relating to China, the USMCA (Canada and Mexico) and Japan. In addition, news articles documenting current strain in the U.S. agricultural economy, where ongoing disputes may be a contributing factor, are also included.
American Bankers Association Farm Bank Performance Report
Last week, the American Bankers Association (ABA) released its annual Farm Bank Performance Report. Today’s update includes several highlights from the ABA update.
ERS Analysis: Southeast Asia- Growing Meat Demand, Feedstuffs Imports
Earlier this month, the USDA’s Economic Research Service (ERS) published an article (“Southeast Asia’s Growing Meat Demand and Its Implications for Feedstuffs Imports,” by Tani Lee and James Hansen) which explained that, “Southeast Asia’s rising incomes, growing population, and increasing urbanization have contributed to growth in livestock production and meat consumption, particularly poultry and pork.”
U.S., China Trade Talks- Planned Timeline and Agricultural Issues
Recent news developments point to a potential timeline for ongoing U.S., China trade negotiations. More narrowly, articles have also discussed agricultural variables that have arisen in the talks; and as the trade war persists, farmers are feeling unease about the potential outcome. Meanwhile, tariffs continue to impact the flow of soybean exports.
Federal Reserve: Observations on the Ag Economy- April 2019
On Wednesday, the Federal Reserve Board released its April 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.
Farmland Values Currently Steady Economic Concerns- But Potential for Declines Exist
Recent news items from the Corn Belt point to several economic challenges facing producers as spring planting approaches. Nonetheless, relatively steady farmland values continue to be a bright spot. But a recent update from the Federal Reserve Bank of Kansas City noted that: “If farmland sales continue to increase in 2019 alongside persistently low agricultural commodity prices and higher interest rates, farmland values could decline further.”
Disaster Aid Issues
On Tuesday, the House Appropriations Subcommittee on Agriculture held a hearing regarding the Administration’s FY 2020 Agriculture Department Budget Request, and heard testimony from Secretary of Agriculture Sonny Perdue. During the discussion part of the meeting, significant attention was focused on recent flooding in the Midwest, and disaster aid legislation. Today’s update highlights that discussion, as well as other developments associated with disaster aid legislation.
FAPRI Baseline: Pressure on Farm Finances Likely to Continue
A news release yesterday from the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri indicated that, “Pressure on farm finances appears likely to continue according to the latest analysis of national and global agricultural trends from the University of Missouri. While the analysis shows a projected net farm income increase in 2019, farm income remains below the average of 2014-17. Longer-term projections suggest little change in real net farm income over the next decade, resulting in continued increases in the farm sector’s debt-to-asset ratio.”
U.S.-China Trade Talks: “Great Progress,” Yet “Some Way to Go.”
Late last week, Los Angeles Times writer Don Lee reported that, “Despite hopes that a U.S.-China trade deal is at hand, President Trump said Thursday that some key issues have yet to be resolved and that they are not close enough for him to announce a summit with Chinese President Xi Jinping.”
House Appropriations Subcommittee on Agriculture Hearing on the Rural Economy
On Tuesday, the House Appropriations Subcommittee on Agriculture held a hearing titled, “The Rural Economy.” Today’s updates provides a brief recap of some of the issues that were discussed at the Subcommittee meeting.
U.S. Soybean Exports to China Increased in February; Trade Negotiations Return to Washington, D.C.
A recent news article reported that Chinese imports of U.S. soybeans increased in February, contributing to a narrowing of the trade deficit between the two countries. Nonetheless, the imports were significantly lower than last February. Meanwhile, U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin continued trade negotiations with China in Beijing last week. Chinese Vice Premier Liu He travels to Washington, D.C. this week, as the talks continue.
Diminished Optimism in the Corn Belt
Flooding and gloomy price prospects for corn and soybeans are diminishing optimism in the Corn Belt as spring planting nears. Recent news articles continue to discuss the ongoing negative impacts of Midwestern floods on an already battered farm economy. Meanwhile, corn and soybean prices fell on Friday after the U.S. Department of Agriculture released data relating to prospective planting intentions and grain stocks.
Flooding Brings Additional Concerns for Struggling Ag Economy
A Reuters news article this week stated that, “Frustration is building across farm country at what feels like a never-ending season of bad news.” And an update from the Federal Reserve Bank of Minneapolis recently noted that, “Farmers are dealing with a host of compounding problems.” As spring planting in the Corn Belt approaches, today’s update looks at recent news items that shed light on the condition of the agricultural economy.