I will be on our farm in Illinois later in the week. We haven’t harvested any corn or beans yet, but it is time to get started. When I look out over our fields, I can’t help but think about the roller coaster ride it has been over the year. Prices up, then down – surplus then shortage. Here is a headline in the Wall Street Journal, November 28, 1980. “Big income prices loom as world demands more food.” That was almost 40 years ago.
Corn and soybean prices have taken a dive this week, USDA estimates our farmers planted 90 million acres of corn this year. The trade didn’t expect that many planted acres. And if we really did plant that many, we are certain to see our yield decline because of the difficult planting season. Crop projections are only part of the hammer on our prices. President Trump does not sound optimistic about the trade deal any time soon. He is not even sure the trade negotiators will be meeting in September. The U.S. has labeled China a “Currency Manipulator.” In a surprise announcement the President will not impose an additional 10% tariff on $300 billion in Chinese exports in September. That’s good. Speculation is that China may be hoping to delay action until after the 2020 election. Get a good deal or keep the tariffs in place – that’s what Senate Finance Chairman Chuck Grassley said.
As much as we would like to – the Ag industry can not escape the week to week and day to day damage that our industry suffers from the ongoing trade fights. It is just back and forth. We were hopeful last week when our trade team flew to China to meet with Chinese leadership. But now the White House reports no deal, no progress.
John Block discusses the new budget deal and how it will affect future Americans