the feed summer 2018 - farmermac.com · may 21, 2018 jackson takach, director of economic and...
TRANSCRIPT
May 21, 2018
Jackson Takach, Director of Economic and
Financial Research
Ryan Kuhns, Economist
The Feed – Summer 2018
FARMER MAC
Agenda
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Highlights from the analysis
Why they are important for
producers and lenders alike
Other news and factoids
How you can access this and future editions
Q&A
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Highlight 1: Off-Cycle Ag Economic Update
• Lots of newly updated data on the agricultural economy published since
USDA’s last forecast back in February
• Authoritative Analytics forecast suggest 2017 may have been stronger than
initially expected
• Outlook for 2018 is relatively flat incomeFARMER MAC REFRESH
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0
20
40
60
80
100
120
140
160
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018F
Authoritative
Analytics May
Forecast
USDA February Forecast
Source: Authoritative Analytics forecast and USDA, Economic Research Service Farm Income and Wealth Statistics, February 2018 forecast and historical data.
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Highlight 2: Chinese Ag Trade
• China imports a lot of agricultural goods
• Newly enacted/proposed tariffs only affect a portion of all agricultural goods exported from
the U.S. to China
• But some of them really matter like soybeans, pork, wheat, and a handful of nut products
• Population and income growth still make China a tremendous growth opportunity for U.S.
producers
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0%
5%
10%
15%
20%
25%
30%
-
30
60
90
120
150
180
2000 2002 2004 2006 2008 2010 2012 2014 2016
Percen
t Share o
f Imp
orts
Ch
ines
e Im
po
rts
($ B
illio
ns)
Chinese Imports
Share of Chinese Imports from U.S. (right)
China's Share of World Ag Imports (right)
Source: United Nations Trade data accessed from USDA, Foreign Agricultural Service, GATS.
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Highlight 3: Dairy Doldrums Reversing
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0
50
100
150
200
250
300
350
Milk
Incom
e O
ver
Feed C
osts
Per
Cow
Per
Month
Source: University of Wisconsin Understanding Dairy Markets, Authors Calculations.
Expansion
Contraction
Avg.
Forecast Implied by
May Futures Prices
• Strong exports in February and March pulling up dairy prices
• USDA recently revised milk prices by $0.60 per cwt
• Current futures prices imply average profitability by late 2018 and into 2019
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Highlight 4: Weather
• Drought persists in Southern
Plains and Southwest
• California water low but not
dire straights
• Some dryness in Midwest but
otherwise fairly good
conditions
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Source: Drought Monitor, University of Nebraska-Lincoln; NOAA
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Highlight 5: Aw Nuts
• U.S. almond, pistachio,
and walnut acreage
continue to grow
• Strong demand and
weather-related
production concerns
have lifted Almond
prices
• Walnut markets are
dealing with lower
export demand
compared to last year
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0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2007 2009 2011 2013 2015 2017
Thousands
Almonds Pistachios Walnuts
Source: USDA, National Agricultural Statistics Service.
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Other News
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China soybean snub?
Tight protein margins
Farm bill bust
Economic booster shot
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Details on The Feed
• Quarterly publication
• Focus on sectors and stories
relevant to the season
• Available on the Farmer Mac
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subscribe
(https://www.farmermac.com/thef
eed/)
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