Forces That Will Shape Rural Economy
CoBank outlook report examines key factors that will shape agriculture and markets sectors that serve rural communities throughout the U.S.
Full details in next week's Shortliner news letter.
- Global Economy: Trade-Induced Slowdown to Hit U.S Shores – The global economy is slowing and the effects will spread to U.S. shores in 2019.
- U.S. Economy: Slowing Growth, Accelerating Risk – The U.S. economic expansion is set to become the lengthiest in history this summer. But clouds forming on the horizon suggest more modest growth in 2019 and greater concerns for 2020.
- Monetary policy: Thinning Margin for Error – The world’s largest economies were widely expected to grow in concert in 2018. That growth did not materialize. As a result, the major central banks are now attempting to guide their economies through very different stages of the economic recovery.
- U.S. Government: Split Congress, More Opposition – With a split Congress, finding consensus over the next two years to move large legislation will be difficult, but there are reasons for managed optimism.
- U.S. Farm Economy: Higher Costs and Debt to Hamstring Producers – To steady the agricultural economy, and boost revenues, the sector is dependent on substantive breakthroughs in trade policy. Strong land values remain the positive for farmers and ranchers, although land values could face downward pressure.
- Ag Trade Policy: Seeking Resolution – Three significant trade-related issues must be solved this year to restore some normalcy to agricultural markets: Legislative approval of USMCA, removal of the steel and aluminum retaliatory tariffs and substantive improvement of trade relations with China.
- Grain, Farm Supply and Biofuels: The Rise of Competition – 2019 will be a year of new and intense competition for the grain, farm supply and biofuels sectors. These competitive changes will benefit a few while hurting many along the supply chain.
- Dairy and Animal Protein: Output Grows Again – Of the three major animal protein species, beef appears to be weathering the animal protein oversupply situation best, with favorable fed cattle prices and historically high packer margins resulting from tight processing capacity.
- Rural Electricity: Data Analytics Become a Necessity – Optimization of the grid offers many benefits in cost savings and member relations. However, if co-ops do not harness the power of data to unlock value, third-party providers will step in to provide this service.