Quarterly US Rural Economic Review, December 2018: Agriculture Limps into 2019
- Ongoing trade disputes will continue to be the primary factor affecting agricultural supply chains in 2019. A new agreement with Mexico and Canada is not expected to be complete until mid-2019. Negotiations with China will not be resolved by the end of the 90-day period in March.
- The U.S. economy will sustain momentum entering 2019. However, rising interest rates, trade uncertainties, and a weakening global economy will drag on growth expectations.
- Abundant supplies of corn, wheat, and soybeans are weighing on prices amidst trade disputes. The U.S. soybean market continues to be profoundly affected by the loss of the China market.
- Compressed margins are forcing some ethanol plants to reduce production or close altogether.
- After experiencing growth for four years, the animal protein sector, particularly beef, will be put to the test in 2019 as exports slow and domestic supply grows.
- Persistent low milk prices are resulting in more U.S. dairy farms closing and herds being liquidated.
- While favorable weather helped many specialty crops flourish this year, natural disasters, product recalls, tariffs and disease are deeply impacting the industry.
- Outdated infrastructure replacements and droughts are combining to push rural water rates higher.
- The Federal Communications Commission is addressing shortfalls, bringing regulatory relief, and expanding satellite options in an effort to spur rural broadband expansion.
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