The state of the U.S. Agricultural economy has led agricultural publications to use up a lot of the ink recently, and maybe for good reasons. According to the U.S. Department of Agriculture’s ’May 2024 Outlook for U.S. Agricultural Trade Report, the agricultural trade deficit was forecast be $204 billion. But a recent revision to that report pegs the U.S. Agricultural trade deficit at $212 billion for the fiscal year that begins October 1st. The Food and Environment Reporting Network, cites steadily growing consumer demand for imported produce, alcohol, coffee and sugar as part of this problem. Meanwhile, U.S. ag exports continue to fall. So now the USDA is estimating that U.S. agricultural exports in FY 2025 are forecast to be $169.5 billion. This decline is being driven by lower-valued sales for U.S. agriculture’s Big Four crops that include soybeans, corn, cotton and beef. On the plus side, USDA foresees a $1.2 billion increase in U.S. “horticulture” exports, mostly for fresh and processed fruits and vegetables, which will amount to a record $41.5 billion.
An interesting historical note is that Thomas Jefferson contended that the United States should import all of the manufactured goods the country needed, while paying for them by exporting agricultural goods. In 2023, U.S. exports of all products made and grown in the U.S. totaled just over $3 trillion, while ag exports were $174 billion.
Although Congress returned last week after their six weeks recess, most observers think that the possibility of seeing a new farm bill signed into law before October 1st are slim to none, since they still have to argue about funding for the federal government that also expires on September 30th. So it may not be a surprise that farmers who responded to the Purdue University CME Survey at the end of August were not very keen on the Ag economy. The survey reported that farmer sentiments were on par with the sentiments farmers expressed in late 2015 and early 2016 when the U.S. ag economy was in the early stages of a downturn. Farmers were most pessimistic about near-term conditions, since the current index fell 17 points below a month earlier. Sentiment weakness was driven by expectations for a weak farm financial performance that extended to a lowered outlook for capital expenditures by farm operations.
On a positive note, The 2024 Colorado’s Electric Cooperatives Junior Livestock Sale held at the end of August at the Colorado State Fair brought in more than $476,000 from the auction of 105 animals that were raised and shown by young people from across the state. The 2024 Grand Champion Market Beef, raised by Jake King of Washington County, was sold for $50,000 at the Auction.
The National Weather Service is predicting that the temperature outlook for September through November 2024, favors a warmer-than-normal season for much of the southwest, with an over 60% probability that Arizona, Colorado, New Mexico and Utah, are likely to experience an unusually warm Fall. La Nina is favored to develop during the September to November period, and once it’s established, there’s a 70% chance that it will persist through the winter of 2024-2025.
