March 12-14, 2018
Chris Peacock attended and participated in the National Land Conference on March 12-14, 2018 in Nashville, Tennessee. Attendees represented nearly every state in the continental US. Chris is an Accredited Land Consultant and was asked to lead three discussions on crop leases and farm management during this conference, which he found very insightful. Discussions provided input and approaches from professionals from various parts of the country. Following is first of two summaries of the 2018 National Land Conference:
Farm Bill: This is a very important topic in agriculture today with the current farm bill set to expire in September 2018. The current administration is focusing on passing a new farm bill by mid-2018. Approximately 80% of the farm bill spending relates to the Supplemental Nutrition Assistance Program (SNAP) which includes the Food Stamp program and provides financial assistance for low income and no income people living in the US. The farm bill also directly impacts the farm sector in various capacities, two of which include influencing agricultural production and providing a financial safety net for U.S. farmers. As of today, supplemental nutrition and federal crop insurance are projected to cost less while commodity programs are projected to cost more due to lower crop prices. The new farm bill could significantly impact farm income and the farm safety net, which could impact farm investment values.
Trade Agreements: We are closely monitoring the 19 year old China Trade Agreement and the 24 year old North American Free Trade Agreement (NAFTA). China is a major importer of U.S. agriculture products. China accounts for more than 50% of the U.S. soybean exports totaling over $14 billion annually. China also imports another $7 billion annually in other U.S. agriculture exports for annual imports exceeding $21 billion. The concern with China today is their possible retaliation to President Trump’s new tariffs on China steel and aluminum imports into the U.S., which essentially blew up the China Trade Agreement. If China retaliates with additional tariffs on US agriculture products, this could significantly damage the U.S. agriculture economy. The same can be said of the 24 year old NAFTA and the imbalance of trade with Mexico. Remove the auto industry and auto parts from the equation and the US/Mexico trade comparison is reasonably balanced. Mexico is the largest importer of U.S. corn, plus Don Parrish of the American Farm Bureau Federation stated last week that approximately one ham from every hog produced in the U.S. is exported to Mexico. As of 2016, Mexico imported approximately $17.9 billion in U.S. agriculture products. Mr. Trump is a very effective negotiator. We certainly hope that he will renegotiate these out dated trade agreements without damaging our agriculture economy.