Good morning. This is Bob Bragg with the July 16th edition of Farm News & Views.
Farmers in the mid section of our country continue to be affected by too much water this growing season. Although soils have started to dry out in some fields in the Corn Belt they may soon be getting a lot wetter, since Tropical Depression Barry is following the Mississippi River Valley northward, dropping precipitation on fields that have received way too much rain already. Before it dies out, it’s likely to have affected 12 states, dumping from one to more than three inches of rainfall over the next couple of days according to the National Weather Service. But then, as the storms passes, the areas in Barry’s wake are expected to suffer from a “widespread” heat wave starting later this week.
On Friday last week, President Trump defended his trade record during a speech in Milwaukee, Wisconsin, contending that some farmers were doing well because of the administration’s $16 billion dollar trade mitigation package. But according to the Federal Reserve Bank of Minneapolis, there are a variety of agricultural products that have been affected by the trade spats. For example, Wisconsin dairymen have been hit hard by a drop in the sale of whey, a byproduct of cheese making. Also, Wisconsin’s exports to China have dropped by $134 million or about 25% in the first four months of 2019, compared with the same period in 2018. Across the six states in the Minneapolis Fed district, exports to Canada, China, the EU and Mexico fell by more than $1 billion from 2018 to 2019. Some of the goods that were affected the most include soybeans, pork, ethanol and combine harvesters.
During the economic downturn that started in 2008, the agriculture sector was a cornerstone that kept the economy in many small, rural communities viable into the middle of this decade. At the same time the nations largest banks moved their loan portfolios out of the mortgage market into agriculture, and began lending to farmers who had plenty of income and equity due to high grain prices and the rising value of farmland. Recently, the Reuters news organization reported that those same banks are now bailing out of agriculture because of low crop prices, dropping farmland values, and the uncertainty of the continuing trade war with China. However, Fed Chairman Jerome Powell told senators last week that rural banks remain in good shape in spite of the difficult conditions that are currently affecting farmers. He pointed out that they have had a lot of experience dealing with the issues that farmers are now facing.
After President Trump met with Chinese President Xi Jinping at the G20 Summit in late June, he said that China would purchase a tremendous amount of agricultural goods as part of the an agreement to suspend additional tariffs on Chinese goods imported to the U.S. and to renew trade negotiations. Farm commodity organizations soon began to ask the question “how soon will these purchases start? Last week, Trump tweeted that quote, “China is letting us down in that they have not been buying the agricultural products from our great Farmers that they said they would, Hopefully they will start soon!” However, A Chinese government spokesperson said Wednesday that any plan to buy more U.S. farm goods must still be agreed on by both sides.
Today’s thought is a quote attributed to the Greek Philosopher Aristotle. “The least deviation from the truth is later multiplied a thousandfold.”
Until next week, this is Bob Bragg.