Jan 15, 2019

Fruit Grower Report

By: Bob Larson

Download Report: Farmer_Mac_s_Year_Ahead_Pt_1.mp3

With today’s Fruit Grower Report, I’m Bob Larson. With 2019 officially underway, many of us are wondering what lies ahead for the economy, but especially the agriculture economy.

I asked Farmer Mac’s Director of Economic & Financial Research, Jackson Takach what farmers have to look forward to in 2019 …

TAKACH … “It’s almost what do they NOT have to look forward to, and I don’t think we’re going to see a huge drop in farm incomes. Unfortunately, that means we’re not going to see a huge increase in farm incomes either.”

Takach says don’t expect much upward movement …

TAKACH … “You look at commodity prices, where supplies are, it’s going to be hard for commodity prices to move much higher. We have a lot of corn, a lot of soybeans, a lot of wheat and unfortunately with some of the trade restrictions that are in place now it’s just going to be hard to move that into international markets which typically gives us an outlet for that excess supply.”

And a deal with China would certainly help …

TAKACH … “That would be a great thing. So, the closer we can get to a deal, it doesn’t have to be a permanent solution, it could just be some easing of that 25% retaliatory tariff that China has on soybeans. Anything that would reduce that amount would increase soybean prices almost immediately. Right now, we’re at about a 25% discount to Brazilian soybeans. So, if we could get that tariff lifted, even half of it lifted, would raise soybean prices by whatever we’re lifting that tariff by.”

Takach says stay positive …

TAKACH … “When there’s this much uncertainty as to what’s going to happen, a little bit of news goes a long way to changing people’s market expectations.”

Listen tomorrow for more on agriculture in the coming months.

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