DENVER, Oct. 12, 2018 (GLOBE NEWSWIRE) -- Strong growth in both the U.S. and global economies will support increased demand in domestic and export markets through the end of the year. However, U.S. competitiveness is currently constrained by trade uncertainties and the elevated value of the U.S. dollar, further placing pressure on the agricultural economy as output in most industries rises.
The latest Quarterly Rural Economic Review from CoBank’s Knowledge Exchange Division indicates that any significant farm price improvements over last year’s prices will be limited, particularly with record U.S. yields for many of the major crop commodities adding to available supply levels. Meanwhile, the animal protein and dairy sectors continue to benefit from strong domestic demand and the promise of better access to Mexico and Canada, but will need more export market growth to absorb their current pace of output and expansion.
“Agricultural markets are being squeezed as prices remain weak,” said Dan Kowalski, vice president of CoBank’s Knowledge Exchange Division. “While recently negotiated trade deals show some upside for agriculture, global demand for output from the U.S. agriculture sector is being outpaced by current U.S. production.”
CoBank quarterly economic reviews provide updates and market outlooks covering several topics and industries, including: Global and U.S. Economic Environment; U.S. Agricultural Markets; Grains, Biofuels and Farm Supply; Animal Protein; Dairy; Other Crops; Specialty Crops; and Rural Infrastructure Industries.
Key Factors and Findings
The CoBank report reveals that the escalating trade war with China is the leading risk for U.S. agriculture and that retaliatory actions taken by China and other trading partners have raised concerns of long lasting effects on agricultural supply chains. However, U.S. Department of Agriculture assistance to farmers and ranchers suffering hardship may have a modest impact on farm financial conditions.
Other key findings include:
The full quarterly U.S. rural economic review, “Rising Output Compressing Agricultural Margins,” is available at cobank.com.
About CoBank
CoBank is a $131 billion cooperative bank serving vital industries across rural America. The bank provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated Farm Credit associations serving more than 70,000 farmers, ranchers and other rural borrowers in 23 states around the country.
CoBank is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture, rural infrastructure and rural communities. Headquartered outside Denver, Colorado, CoBank serves customers from regional banking centers across the U.S. and also maintains an international representative office in Singapore.
For more information about CoBank, visit the bank's website at cobank.com.