Sponsored by the American Farm Bureau Federation
READ the NAFB’s National Ag News for Wednesday, January 9th
Ag Economy Barometer Declines in December
The Purdue University/CME Group Ag Economy Barometer declined moderately in December to 127, seven points below the index’s value one month earlier. The Barometer is a monthly nationwide measure of the health of the U.S. agricultural economy. A rating below 100 is negative, while a rating above 100 indicates positive sentiment regarding the agriculture industry. The December 2018 barometer was virtually unchanged from December 2017 when the barometer stood at 126. The monthly decline however in the Ag Economy Barometer occurred because producers’ perceptions of current conditions and their expectations for the future both drifted lower this month compared to November. Organizers say it should be noted that this month’s survey was completed before President Trump signed the 2018 farm bill into law, and before the government shutdown began. The survey says international agricultural trade issues continue to cause concern and could be causing producers’ reduced confidence in current economic conditions.
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Amid Shutdown, USDA Extends Market Facilitation Program Deadline
The Department of Agriculture has extended the deadline for producers to apply for payments under the Market Facilitation Program. Agriculture Secretary Sonny Perdue announced the extension as the original deadline had been January 15, 2019, but farmers have been unable to apply for the program since the lapse in federal funding caused the closure of USDA Farm Service Agency offices at the end of business on December 28, 2018. The deadline will extend over the period equal to the number of business days FSA offices were closed, once the government shutdown ends. Farmers who have already applied for the program and certified their 2018 production have continued to receive payments. In a statement, Perdue urged lawmakers to “redouble their efforts to pass an appropriations bill that President Trump will sign and end the lapse in funding” so USDA may again provide full services to farmers and ranchers.
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Shutdown Delays WOTUS Comment Period
The government shutdown is delaying a comment period for the Trump administration’s new Waters of the U.S. proposal. The Environmental Protection Agency and Army Corps of Engineers will delay publishing the proposed WOTUS replacement in the Federal Register until after funding is restored at EPA, according to Politico. The 60-day comment period won’t begin until the proposed rule is published in the federal register. Additionally, the EPA had planned a hearing in Kansas City, Kansas, later this month on the proposal. However, due to the shutdown, that hearing has been delayed indefinitely. The WOTUS replacement, welcomed by U.S. agriculture, protects resources, respects the law and provides greater clarity so the agencies and the public can identify regulated federal waterways, according to the American Farm Bureau Federation. Following the announcement of the proposal last month, AFBF President Zippy Duval said the new rule “will empower farmers and ranchers to comply with the law,” protect water resources and allow farmers to “productively work their land without having to hire an army of lawyers and consultants.”
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China Purchases More U.S. Soybeans
China purchased more soybeans earlier this week as the U.S. and China discussed the ongoing trade tensions between the two nations. Monday, Chinese importers purchased at least 180,000 metric tons, but some trade experts say the purchase may be closer to 900,000 metric tons, according to Reuters. The gap in purchase size is reflected by the lack of USDA export sales reports during the government shutdown. The purchases of U.S. soybeans, an estimated five million metric tons in the current marketing year, is a fraction of the 23 million metric tons purchased by China in the previous marketing year. China halted purchases of U.S. soybeans last year after the nation placed a tariff on U.S. soybeans in retaliation to U.S. trade policy against China. About 60 percent of all U.S. soybean exports are shipped to China every year, with most purchases made during the last three months of the year.
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Supreme Court Rejects Challenges to State Animal Ag Laws
The Supreme Court this week rejected to hear challenges to state animal ag laws. The Supreme Court rejected oral arguments in two lawsuits, one against California and another against Massachusetts, regarding interstate commerce of agriculture products. The lawsuits allege the states are regulating agricultural production across state lines. Missouri and Indiana led the lawsuits, arguing California and Massachusetts laws would block the sales of ag products from other states by enacting strict production requirements, such as cage-free egg production standards. DTN reports that by letting the two laws stand, the high court essentially rejected the arguments by Missouri, Indiana and other states that the two related cases are “original actions” that should first be heard by the Supreme Court rather than go through circuit and appeals decisions first.
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Farmers National Offers 2019 Land Market Predictions
Farmers National Company expects land values to follow recent trends in 2019. In an analysis of the land market, the company points out that interest rates and Treasury Note yields are affecting land values. Both seem to be on somewhat of a plateau or a very slow rise based on Federal Reserve comments and the marketplace. Meanwhile, commodity prices are working through big U.S. crops, world demand, changing tariff impacts, and planting time projections all coming together to make it difficult to predict price levels this coming year. Farmers National Company is seeing a small increase in sales activity mostly prompted by non-operating landowners deciding it is time to sell. The demand to buy farmland continues to hold fairly well in most regions but has turned more cautious over the past few years. Given the factors in place at this time, the analysis by Farmers National suggests that the land market in 2019 will react much like it has the last several years, but with an increased amount of caution on the part of buyers.
