Recent news articles point to a feeling of unease among U.S. farmers regarding President Trump’s threat late last week to impose import tariffs on Mexican goods. Mexico is a top export market for U.S. corn and pork, and additional complications with ratifying the USMCA trade pact are unwelcome while trade negotiations continue with China, the European Union, and Japan. Meanwhile, the U.S. Department of Agriculture released its quarterly projections for U.S. agricultural trade last week. Today’s update highlights these issues in greater detail.
Farm Policy News
Farmers Face Difficult Decisions as Spring Planting Lumbers On
Farmers continue to cope with difficult planting conditions that have bogged down corn planting this spring to a record slow pace. Policy uncertainty stemming from recently announced executive branch trade assistance persists, and the House of Representatives has been stymied in its effort to pass a disaster relief bill. Today’s update discusses these issues in more detail.
China Halts U.S. Soybean Purchases, While USMCA Prospects Unfold Under a new Threat of Tariffs on Mexico
Today’s update reviews recent news articles that highlight two important trade issues impacting U.S. farmers: China’s imports of U.S. soybeans, and the likely ratification of the USMCA Agreement with Canada and Mexico. President Trump added a wrinkle to the USMCA issue Thursday evening by threatening to implement escalating tariffs on all Mexican imports beginning June 10. Recall that Canada and Mexico are the two largest U.S. agricultural export markets, while China ranks fifth.
Planting Troubles Worsen, Progress Lowest on Record for Corn
Unrelenting rainfall continues to cause headaches for Corn Belt farmers. Record-breaking precipitation this year has lead to flooding and historic delays in the pace of U.S. corn planting. Soybean planting has also fallen significantly behind the five year average. Today’s update recaps recent news articles and government reports that discuss these issues in more detail.
Weather, and Policy Uncertainty Converge on Farmers’ Planting Decisions
Ongoing wet weather in the Corn Belt, along with uncertainty associated with recent executive and legislative branch policy related actions, have converged on U.S. farmers as planting deadlines loom. With June just days away, producers are sorting though both known, and significant unknown variables, in an effort to figure out how to maximize returns on their operations. Today’s update highlights some of these issues in more detail.
Trump Administration Announces Additional Trade Aid to Farmers
Wall Street Journal writer Josh Zumbrun reported on Thursday that, “The Trump administration said it would spend $16 billion to offset the impact on American agriculture from the trade conflict with China, with most of the money taking the form of direct payments to U.S. farmers.”
African Swine Fever Continues to Disrupt Markets
Recent news articles and government reports show that African Swine Fever (ASF) continues to have a disrupting impact on soybean and pork markets. Today’s update highlights key points from several of these sources.
Welcome News on Trade, But Unresolved Issues Linger
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.
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.”