Soybeans Need Good News

By: Todd Hubbs, Department of Agricultural and Consumer Economics .University of Illinois. Originally published by farmdoc daily (10):14

Soybean futures prices fell again last week on reports of a coronavirus outbreak rattling the Chinese economy and the prospects of a huge Brazilian crop.  A double hit associated with increased production from our main competitor and a potential drop in Chinese demand appears set to drive prices lower in the near term.  If present consumption trends stay in place this marketing year, the prospect of ending stocks dropping substantially below the current projection of 475 million bushels seem remote.

The coronavirus outbreak continues to spread around the world.  The Chinese government’s attempt to contain the virus appears to have fallen short and brings up the possibility of a hit to China’s economic growth.  While China’s growth and integration in world markets helped commodity prices, the risk-off approach to most equity markets under the prospect of reduced growth in China is hurting agricultural commodity prices.  Soybeans are particularly impacted by this development. Continue reading

MFP Details Announced

Source: USDA

The United States Department of Agriculture (USDA) released details of the 2019 Market Facilitation Program (MFP) payments announced by the Trump Administration in May. MPF will provide up to $14.5 billion to producers in up to three tranches starting with a first round of payments this August.

Payment rates vary by county from $15 to $150 per acre based on USDA’s calculated damages from tariffs in each individual county affected — most in the $50 to $75 range per acre, according to USDA. That single-county rate will be multiplied by a farm’s total planted acreage for all MFP-eligible crops in aggregate for 2019, not to exceed total 2018 plantings. The county rates for Ohio can be found here.  Continue reading

Prevented Planting, 2019 Market Facilitation Program Payments, Disaster Assistance, and Price Dynamics

By: Gary SchnitkeyKrista SwansonRyan Batts and Jonathan Coppess with the University of Illinois Department of Agricultural and Consumer Economics University of Illinois and Carl Zulauf, with the Ohio State University Department of Agricultural, Environmental and Development Economics

We stand at a point of extreme price and policy uncertainty. In the Midwest, corn planting is historically late and many acres are or soon will be eligible for prevented planting payments on corn crop insurance policies. On many farms, corn prices have not increased enough to cause net returns from planting corn to exceed net returns from prevented planting. However, the U.S. Department of Agriculture announced a 2019 Market Facilitation Program (MFP) and has currently indicated that payments will be tied to 2019 planted acres. The 2019 MFP could provide incentives to plant crops and not take prevented plantingpayments. Moreover, this program could bring a little used option into play this year: take 35% of the corn prevented planting payment and plant soybeans after the late planting period for corn. Adding confusion to this situation is a disaster assistance program that, has passed Congress and recently signed by President Donald Trump. Continue reading

ASF Outbreak in China Could Create a 12 MMT Global Meat Shortage

By: Tyne Morgan, US Farm Report

African Swine Fever continues to spread through China, but the tallies on death tolls are misleading to some analysts. The disease hit a major livestock production province of Shandong. Even though there’s been one reported case, Arlan Suderman of INTL FCStonesays the official reports aren’t accurate.

“We see the breeding herd in Shandong down 42%, even though they’ve only had one reported case in Shandong,” said Suderman. Continue reading

High Yields and Aid Help Offset Low Commodity Prices

By: Ohio’s Country Journal & Ohio Ag Net Staff

Record-high crop yields and new government aid are expected to help insulate Ohio crop farmers from significant financial losses that would have occurred because of low commodity prices, according to a recent Ohio State University study.

If net income for farms across Ohio this year follows the projected national trend, then it will decrease by 15% compared to last year’s total. But it could have been a whole lot worse. Continue reading

China’s Acreage Gap

By: David Widmar, Previously Published by Agriculture Economic Insights

A significant driver of the farm economy boom was China’s surge in soybean consumption. This impacted U.S. and global markets as China relied on imports to meet domestic demand.  While we have previously examined these trends for soybeans (here and here), this week’s post considers the broad impact of China’s production and consumption trends across thirteen commodities. The results reveal a large acreage gap between China’s production and domestic consumption. Continue reading

Details On How USDA Calculated Aid Payment Rates

By: Anna-Lisa Laca
Previously published by Farm Journal’s PORK

As promised by Agriculture Secretary Sonny Perdue, USDA released details on how aid payments were calculated on Thursday. The details, which were released by the office of USDA Chief Economist Robert Johansson, explain how payment rates for the Market Facilitation Program (MFP) were determined. Continue reading

15 Questions and Answers On the USDA Trade Retaliation Mitigation Payments

By: Jessie Scott, Previously published in Successful Farming

The USDA’s Trade Retaliation Mitigation package announced earlier this week will distribute $4.7 billion in cash payments to producers through the new Market Facilitation Program (MFP). The goal of the program is to assist farmers in response to trade damage from unjustified retaliation by foreign nations.  Continue reading

Farmers Await Details on USDA Trade Assistance

By: Keith Good, University of Illinois. Previously published by Farm Journal’s Pork online

U.S. farmers are anxious for details on the trade assistance package the administration announced in July. Press reports indicate that program guidelines could be issued by August 24th. Meanwhile, business news articles and USDA data continue to shed light on agricultural export variables as the ongoing trade dispute with China continues. Continue reading

Hurt: Low Prices Enough to Stop Pork Expansion

By: Greg Henderson, Farm Journal’s Pork

Purdue University economist Chris Hurt tells AgDay reporter Tyne Morgan the strength of the U.S. economy has been a boost to strong beef demand.

Chinese tariffs and increasing supplies are pressuring prices—enough to put a hard stop to expansion. ( Farm Journal )

“There are a lot of people working, low unemployment, and a lot of jobs and rising wage rates those are all positive to meet consumption,” Hurt says. “We’ve got a world that has an economy doing very well, and what that says exports are doing very well.” Continue reading