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August 13, 2018
There are a number of important questions facing agriculture as we move into harvest time. Some may only have regional impact while most will have nationwide reach. As the questions play out to a conclusion, there will be those with an immediate impact while others may have a longer term effect. Two big questions come to the top of everyone's mind here in mid-August.
The biggest question facing much of agriculture today is how long will trade tariff issues last? If trade issues get resolved in the very near future, we would hope to see agricultural exports from the U.S. go back to a more normal pattern and a resulting improvement in commodity prices. If the issues drag on, how soon will ag trade adjust and prices improve? Finally, longer term, will there be an effect on production and trade patterns that could cost U.S. producers? At this moment in time, there don't seem to be answers and no one has any idea about the longer term effect on commodity prices and producer finances.
The second big question is whether the corn and soybean crops will be as large as predicted. Knowing that there are areas where crops were hurt by a wet planting season and other areas in the midst of a drought this summer, it is hard to think about large crops. Grain prices react immediately to forecasts, but it is the on-going demand for our commodities that will determine grain prices in the months to come.
With the crop size question, we will know the answer after harvest. For the trade tariff question, we hope it is resolved in the very near future so that we can take away the negative impact on commodity prices and net farm income.
Senior Vice President - Real Estate Operations
|Category: Agricultural Real Estate News|