CoBank says the world’s economy is continuing to slow down and the ongoing U.S.-China trade dispute is one of the reasons. While there are hopes that the two countries will continue talks, CoBank says optimism for the trade dispute ending in 2019 is fading.
In addition to the trade challenges, too much rainfall has significantly impacted the U.S. agricultural sector. The latest Quarterly Rural Economic Review from CoBank says global economic development continues to go in the wrong direction as tariffs put a drag on global trade and manufacturing.
Financial stress continues to build on the agricultural sector. Domestic demand hasn’t kept up with last year’s large corn supplies. However, soybean crush remains robust due to low soybean prices. Ethanol producers who are getting squeezed by the longest low-margin period in years are now facing the possibility of limited corn due to planting challenges.
The animal protein sector continues to be negatively impacted by things like African Swine Fever, trade challenges, and bad weather. Hog prices and feed costs indicate healthy margins for producers in 2020, but that could change if pork exports don’t pick up.