CoBank is cautiously optimistic about the economy and agriculture in 2020.
Kansas City In its Quarterly U.S. Rural Economic Review, CoBank’s Knowledge Exchange Division noted that as 2020 got underway, there were encouraging indicators for the American economy and agriculture.
CoBank, which also expected benefits for the animal protein industry, stated that “producers, input suppliers, and exporters alike should benefit from optimism over the phase one China deal.” While winter wheat seedings are predicted to be at all-time lows, CoBank also anticipates higher milk prices and larger U.S. plantings of corn and soybeans in 2020.
“Compared to how it started, the fourth quarter is ending with much more optimism on trade and the economy,” CoBank stated, highlighting a year-end “blitz” on trade (including the development of the U.S.-Mexico-Canada Agreement and a phase one deal with China), immigration reform, and agricultural labor. “The agricultural sector, rural economies, and the US economy would all benefit greatly from all three of these policies.”
Even though they haven’t been confirmed, CoBank pointed out that signs China decided to purchase $40 billion worth of agricultural products from the United States each year would help the country’s agriculture industry as a whole “because soybeans would account for only a small portion of the increase.”
On January 15, the United States and China are scheduled to sign a trade agreement.”We anticipate China to keep granting tariff exemptions to its agricultural importers, thereby reducing the cost of purchasing U.S. goods,” CoBank stated.
The “wealth effect” of record highs in equity markets, the 50-year-low jobless rate, salaries exceeding inflation, solid house prices, robust consumer spending, and the Federal Reserve’s three rate reduction in 2019 all contributed to the U.S. economy’s ongoing “hum” into 2020, according to CoBank.
According to CoBank, “the economy’s current strength is precarious in that it is almost entirely dependent on consumers.” “Companies have not been making capital goods investments, and corporate revenue growth has slowed as labor costs have continued to rise.”
Regarding agriculture, CoBank stated that 2019’s unfavorable weather had a significant impact on crop quality, base levels, and crop prices.
You may also like:
Food security in emerging nations: issues and remedies
Are drinks the secret to increasing cannabis use among consumers?
Managing the lack of labour for mushroom picking
According to CoBank, “corn and soybean prices ended nearly unchanged for the (fourth) quarter despite the extreme weather and price volatility.” Prices for sugar, wheat, rice, cotton, and rice increased at the conclusion of the quarter due to worries about lower US harvests and faster export growth.
“Trade tensions, a strong dollar, and volatile weather were the main factors affecting U.S. grain and oilseed exports and production in the fourth quarter.”
In light of the quality issues surrounding the 2019 harvest and the significant quantity of grain still in the fields, we anticipate further reductions in the final production, yield, and ending stock levels for corn and soybeans.
Grain elevators were storing maize to catch carry, according to CoBank, but they were having trouble purchasing corn due to weak farmer sales and delayed harvests in the fourth quarter. However, grain handlers were more likely to purchase soybeans than corn, and farmers were more likely to sell soybeans.
Smaller Southern Hemisphere wheat crops, particularly in Australia, may help U.S. exports to Southeast Asia, according to CoBank. Another yearly decline in winter wheat plantings to record lows would partly be explained by planting difficulties and poor emergence in certain regions.