commodity prices
Agriculture feels impact as pandemic reshapes U.S. diet, rattles producers
Americans will eat more chicken, already their favorite meat, as stay-at-home orders have consumers shopping at the supermarket rather than going to restaurants, said ag lender CoBank on Thursday in assessing the impact of the coronavirus pandemic on food producers and processors. <strong>(No paywall)</strong>
Roberts: $9 billion for livestock producers
Out of the $23.5 billion earmarked for agriculture in the latest coronavirus relief package, "I think at least $9 billion will be going to livestock producers," said Senate Agriculture chairman Pat Roberts on Wednesday.<strong>(No paywall)</strong>
USDA outlook: Record corn crop to swell U.S. stocks, soy exports to recover
U.S. farmers will harvest their largest corn crop ever this year, fueled by the largest plantings since 2013 — growing so much corn that carry-over stocks will be the largest in more than three decades, according to USDA's projection at its annual Ag Outlook Forum. The soybean crop would be the fourth-largest on record, with exports recovering to pre-trade-war levels thanks to "increasing global import demand, particularly for China."
Trump tariff payments bolster farmer income
Although ag bankers in the Midwest and Plains say the administration's multibillion-dollar trade war payments were a boon to farmers and ranchers, some lenders are still concerned about underlying weaknesses in the sector.
USDA approves state hemp production plans
For all its cachet as a potential money-making crop for American farmers, industrial hemp ranked midway between safflower and flaxseed in plantings, with an estimated 230,000 acres in 2019, and industry leaders disagree whether 2020 will be a year of expansion or retrenchment. But the USDA is approving state plans to regulate hemp production and offering crop insurance for hemp growers, steps that could help establish the crop.
Sino-U.S. trade deal: Big numbers, few details, many questions for ag
Although President Trump declared "a very large Phase One Deal with China," the White House put few agricultural details in writing over the weekend, saying the agreement calls for "substantial purchases" of farm exports, rather the quadrupling trumpeted by U.S. trade representative Robert Lighthizer. Analysts such as Joe Glauber of IFPRI were dubious that U.S. exports, forecast at $11 billion this year, could leap overnight to the $40-billion-a-year level cited by the administration.
Farm income is highest in six years, thanks to Trump’s trade-war bailout
Fueled by $14.5 billion in Trump tariff payments, U.S. net farm income will climb to its highest total since the commodity boom crested in 2013 and a dramatic rebound from the plunge that accompanied its collapse, the USDA estimated. When crop insurance indemnities are added to "direct farm program payments," a category that includes trade war aid, land stewardship payments and traditional crop supports, the government will provide an unusually high 31 percent of farm income this year.
Short on cash, some farmers will sell assets during winter
Low commodity prices and high costs are tightening the credit squeeze on the farm sector, with little expectation of improvement in the near term, according to ag bankers in the Midwest and Plains. Some farmers and ranchers will liquidate assets during the winter to stay afloat, and some highly leveraged operators will be forced out of business, they said.
U.S. economy slows as corn and soy output soar, according to USDA projection
With a return to normal weather, farmers will expand vastly their corn and soybean plantings next year — enough to produce their largest corn crop ever and the fourth-largest soybean crop, according to USDA's agricultural projections. Bumper crops will drive down market prices in the near term and create huge stockpiles that will take years to whittle down.
Retaliatory tariffs bite U.S. farmers, not the importers
For nine of the 11 commodities examined by ag lender CoBank, "U.S. producers — not the importing country or its consumers — paid the cost" of retaliatory tariffs. "U.S. farms are taking the brunt of the retaliatory tariffs placed on their products, reflecting the lopsided balance of power between U.S. producers and their importing customers," concluded three CoBank analysts, who said America will pay a price in the future, too.
Money begins to flow on second year of Trump bailout of U.S. agriculture
Two months after President Trump announced a $16-billion package to buffer the impact of the Sino-U.S. trade war on farmers and ranchers this year, the first driblet of the money is flowing — $100 million for market development. The awarding of the funds, announced by the USDA over the weekend, suggests the rest of the program could swing into operation in the days ahead.
World lacks drive to reform agricultural supports
More than $500 billion is spent annually around the world on "often ineffective and trade-distorting support to farmers," says the Organization for Economic Cooperation and Development. In an annual report, the OECD said, "little progress has been seen this decade in reforming agricultural support policies."
USDA looking at $15-$20 billion for new Trump bailout
As it did with the Trump tariff payments on 2018 crops, the administration is likely to send money directly to producers in the upcoming round of aid, which may total $15-$20 billion, said Agriculture Secretary Sonny Perdue on Wednesday. That total would be a larger package than the president himself has suggested.
Sharply lower farm-gate prices forecast for U.S. crops
Farmers growing the three major U.S. crops — corn, soybeans and wheat — can expect a sizable decline in the average sales price for this year's harvest instead of the mild upturn that was forecast in late February, said the USDA. In its first projection of the fall harvest, the USDA said season-average prices for the three crops would be 8 to 10 percent lower than anticipated at its Outlook Forum.
Small ag banks mitigate the risk of rising demand for farm loans
In an indirect sign of stress in the farm sector, small agricultural banks are making adjustments, such as syndicating loans and charging higher interest rates, to offset risk in the face of high demand for farm loans, said the Federal Reserve in its quarterly Ag Finance Databook. The Fed's Beige Book, meanwhile, said spring floods in the northern Plains and western Corn Belt could put an additional burden on a farm sector coping with low commodity prices.
Farmers say they will plant fewer acres this year
Aside from planning a 4-percent expansion of corn area, U.S. farmers aren't enthusiastic about spring planting. With little improvement expected in commodity prices, growers say they will plant fewer acres of soybeans, wheat, cotton, rice, sorghum and oats than in 2018, and they'll stand pat on barley.
Farm income below $70 billion — a new average for U.S. agriculture?
The USDA forecast net farm income of $69.4 billion this year. If accurate, the total would be the third year of net income below $70 billion since 2015. “We’re starting to see ... a new average coming out here,” said USDA economist Carrie Litkowski on Wednesday.
Potentially more profitable, cotton takes over soybean ground
Cotton growers plan to expand their plantings by a sharp 3 percent this spring, taking away land from soybeans, the most prominent casualty of the Sino-U.S. trade war, said the National Cotton Council over the weekend. Meanwhile, the USDA said the soybean stockpile will double in size by the time this year's crop is ready to harvest, creating the largest "carryover" ever.