July 18, 2018

USDA forecasts drop for farmer incomes as Trump thinks of them
 

The US agricultural industry is taking a hard hit from President Donald Trump's trade disputes with China, Mexico and Canada, with soybean manufacturers alone expected to lose an estimated US$3.2 billion in the following crop season.

China, which bought US$12 billion of soybeans in 2017, is now shifting to supplies from South America instead.

With Trump's trade policies already changing the outlook for US exports, many farmer incomes are declining as exports continue to stall. Last year, China, Mexico and Canada accounted for 43% of American farm exports.

The US Department of Agriculture (USDA) projected that domestic soybean stockpiles will be 51% larger than expected a month earlier and cut its export forecast by 11%. Additionally, the USDA also reduced its price forecast by US75 cents a bushel, due to a decline in purchases, mainly from China.

Situations are expected to get worse if the trade war escalates and Trump has urged American farmers to be patient.

He tweeted last week, from the North Atlantic Treaty Organisation (NATO), "Always thinking about our farmers."

He added, "Other countries' trade barriers and tariffs have been destroying US farm businesses. I will open things up, better than ever before, but it can't go too quickly. I am fighting for a level playing field for our farmers, and will win!"

Agriculture is the third biggest US export industry and has generated six decades of trade surpluses.

Previously, high commodity prices led to a net income of US$123.8 billion for the farmers in 2013. This year would be the lowest forecasted net income yet since 2006, valuing only US$59.5 billion.

Average farm businesses can expect to see a 7% drop in 2018 according to the USDA data study.

Crop and livestock producers have also warned that reduced exports will impact their industries as they are already facing big inventories and lower prices.