From Quarterly Agricultural Export Forecast, released yesterday.
Fiscal year (October/September) 2019 agricultural exports are projected at $141.5 billion, down $1.9 billion from fiscal year 2018 and $3.0 billion from the August 2018 forecast, largely due to decreases in soybeans and cotton. Soybean export volumes are down because of declining Chinese purchases from the United States as a result of trade tensions, and as a record U.S. crop continues to pressure soybean prices lower.
That’s the title of a new volume released today, edited by Jongrim Ha, M. Ayhan Kose, and Franziska Ohnsorge.
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Ooops. Jumped the gun. Actually Nafta 0.8 will only yield minor benefit to American dairy farmers. In the meanwhile, prices are plummeting…
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That’s from WaPo. In 2017, the US exported 1.2 billion bushels to China: North Dakota’s orphan soybeans today are nearly 1/5 of total sales to China in 2017…
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An interesting symposium in the 2nd Quarter 2018 issue of Choices, published by the Agricultural and Applied Economics Association, deals with the impact of Chinese trade retaliation aimed against US agricultural exports.
I am dubious. End-market year soybean stocks at record highs.
Reuters has an interesting article, entitled “Inside China’s strategy in the soybean trade war”.
Mu Yan Kui … ticked off a six-part strategy to slash Chinese consumption and tap alternate supplies with little financial pain.
Expansionary fiscal policy combined with Taylor-rule induced monetary tightening has resulted in a strong dollar. That strong dollar is driving US agricultural prices.
November soybean futures keep on going down. And the US-Brazil spread has proven durable.
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From Yahoo Finance:
Tariffs imposed as retaliation for US tariffs worsen the US terms of trade (i.e., lower ag export prices), and a strong dollar lowers US ag prices. Rising interest rates due to the collision of monetary and fiscal policies worsens the debt service load of the ag sector, while reducing farmland prices.
Thanks, Trump!