Clements: The farm economy faces more uncertainty in 2019, according to American Farm Bureau Federation chief economist John Newton. Speaking during the 2019 American Farm Bureau Annual Convention and IDEAg Trade Show, Newton says many factors are pressuring the farm economy.
Newton: We’re in a situation where on the grain side we’ve had excellent weather for six or seven straight years now. We’ve had some challenges on the livestock front, I think 2019 will prove to be better for the dairy industry, but if you think about cattle and hogs and poultry, we’re going to have record production in 2019 there, so that’s going to put pressure on prices. The other thing to think about is that while cash receipts continue to increase, they were up one and a half percent last year, costs of production were up four and a half percent.
Clements: Adding to a complex farm economy, uncertainty on trade is creating more challenges.
Newton: I think there’s still a lot of uncertainty on what farm income will be. Obviously, still got to get a crop in the ground, we need to know what acres, how we are going to allocate corn and soybeans, and so on, and ultimately what those crop yields are going to be. But I think most people expect 2019 to be a challenging year given that we still have the retaliatory tariffs on a lot of our commodities.
Clements: However, Newton says the trade issues provide opportunity for a bright spot in the future.
Newton: There certainly is a bright spot. If we get these trade situations resolved, there’s an opportunity to get out and move product. 2018 was a record year in terms of corn exports, so there are some opportunities going forward if we can get these trade situations resolved.
Clements: Micheal Clements, New Orleans.