Corn Crop Growing While Soybeans, Cotton Shrinking
Domestic corn production is expected to be higher than forecast last month while soybean and cotton production is revised lower. That’s according to the Thursday’s October Crop Production Report from the U.S. Department of Agriculture’s (USDA) National Agricultural Statistics Service (NASS), Agricultural Statistics Board.
Corn production is forecast at 14.3 billion bushels, down 6 percent from last year but up 1 percent from the September forecast. Based on conditions as of October 1, yields are expected to average 171.8 bushels per acre, up 1.9 bushels from the September forecast but down 2.8 bushels from 2016. If realized, this will be the second highest yield and production on record for the United States. Area harvested for grain is forecast at 83.1 million acres, down less than 1 percent from the previous estimate and down 4 percent from 2016.
Soybean production is forecast at a record 4.43 billion bushels, down slightly from September but up 3 percent from last year. Based on October 1 conditions, yields are expected to average 49.5 bushels per acre, down 0.4 bushel from last month and down 2.5 bushels from last year. Area for harvest in the United States is forecast at a record high 89.5 million acres, up 1 percent from September and up 8 percent from 2016.
All cotton production is forecast at 21.1 million 480-pound bales, down 3 percent from September but up 23 percent from last year. Yield is expected to average 889 pounds per harvested acre, down 19 pounds from last month but up 22 pounds from last year. If realized, the cotton yield forecast for the Nation will be the second highest yield on record. Upland cotton production is forecast at 20.4 million 480-pound bales, up 23 percent from 2016. Pima cotton production, forecast at 727,000 bales, was carried forward from last month.
Ag Groups Warn Congress About NAFTA Renegotiation
In 1990, Canada, Mexico and the United States embarked on discussions for a multilateral trade agreement that would become the North American Free Trade Agreement (NAFTA). leaders of the three countries signed the agreement on December 17, 1992 and NAFTA went into effect on January 1, 1994. Earlier this year though, U.S. President Donald Trump announced plans to either renegotiate the agreement or leave the deal completely. After three rounds of talks over the past few months, negotiators are in Washington, DC for the fourth round of talks and representatives of the agricultural community are becoming more concerned.
Politco is reporting that the American Farm Bureau Federation (AFBF), the National Pork Producers Council (NPPC) and others have been campaigning in Congress against Trump’s approach to trade policy. With U.S. Commerce Secretary Wilbur Ross saying “as far as I can tell, there is not a world oversupply of agricultural products. Unless countries are going to be prepared to have their people go hungry or change their diets. I think it’s more of a threat to try to frighten the agricultural community.”
Quartz Media reports that the administration has introduced several controversial proposals including: a sunset clause under which NAFTA would have to be re-approved by all member countries every five years to remain in effect; rules to ensure that more U.S.-made parts go into products traded between the three countries; and doing away with certain dispute-resolution mechanisms.
“Agricultural trade pretty much doubled under NAFTA, and there is a large swath of agricultural interests that want to make sure that stays open,” said Carlo Dade, director of the trade and investment center at the Canada West Foundation. The odds of that happening though, seem to be slipping. Bosco de Vega, chief of Mexico’s National Agriculture Council, recently told the Financial Times that his odds of a successful new pact have reversed in the past few months from 70/30 to 30/70. Justin Trudeau, the Canadian prime minister has been upbeat but after a meeting with Trump this week says “circumstances are often challenging, and we have to be ready for anything, and we are. Canadians are aware the Trump administration makes decisions that surprise people from time to time.”
Texas Responsible for 6% of Farm Cash Receipts
Each August, as part of the its Farm Income data product, the U.S. Department of Agriculture’s (USDA) Economic Research Service (ERS) produces estimates of the prior year’s cash receipts – the cash income the farm sector receives from agricultural commodity sales. This data product includes State-level estimates, which can help offer background information about States subject to unexpected changes that affect the agricultural sector, such as the recent hurricane that struck Texas.
In 2016, U.S. cash receipts for all commodities totaled $352 billion. Texas contributed about 6 percent ($21 billion) of that total, behind only California and Iowa. Cattle and calves accounted for 40 percent ($8 billion) of cash receipts in Texas, compared to 13 percent nationwide. Only Nebraska had higher cash receipts for cattle and calves in 2016. Texas led the country in cash receipts from cotton at almost $3 billion (13 percent of the State’s receipts), accounting for 46 percent of the U.S. total for cotton. Milk and broilers each accounted for 9 percent of cash receipts in Texas. The State ranked sixth in both milk and broiler cash receipts nationwide.