Low commodity prices are dealing another blow to the ag trade deficit. USDA is now preparing for the third straight year of losses.
The Department expects the ag trade deficit to hit $42.5 billion when the fiscal year starts October 1st, which is a drop of $4 billion from this year, and marks the third straight year of declines since hitting a record low in 2022. Ag imports are expected to increase by around $8 billion.
The economy is tightening its grip on the ag industry. The Chicago Fed says farmland values are slowing in their district, and credit challenges are starting to appear. Fed policy advisers say repayment rates are also starting to slow.
Despite the challenges, they say farm balance sheets have been strong overall, even with less working capital.
Seasonal beef production gains may moderate retail price pressure, while tight cattle supplies continue supporting producer values.
Higher rail fuel surcharges could add cost pressure even as wheat production falls and grain movement remains active.
The Washington State Tree Fruit Association says crop quality looks promising despite ongoing drought conditions.
New Fed surveys show farmland values remain historically high, though some Upper Midwest markets are beginning to soften.
Fred Seamon with CME Group joins us to discuss the latest Ag Economy Barometer and the key economic pressures shaping producer sentiment in May.
IDA Texas’s Cooper Little discusses producer response to New World Screwworm in Texas, ongoing coordination with animal health officials, and the steps being taken to manage and protect livestock movement across the region.
