U.S. Farmers Struggling
Some key takeaways from a recent article in Barrons titled, “U.S. Farmers Are Struggling. They Will Lose More in a Trade War, [according to Dan Basse, CEO of AgResource].”
1. Declining U.S. Agricultural Dominance:
• U.S. share in global agricultural trade dropped from 62% in 1979 to 11% today and the trade deficit is at a record $42 billion.
• Brazil now leads in soybean and corn exports, surpassing the U.S.
2. Impact of Geopolitical Shifts and Trade Wars:
• The divide between G-7 countries and BRIC nations is altering trade patterns at the expense of U.S. farmers.
• China's pivot away from U.S. agricultural imports benefits Russia, Brazil, and Argentina.
• Potential retaliation from U.S. import tariffs on China, Mexico, Canada, and other trade partners.
3. Economic Pressures on Farmers:
• Corn and soybean production costs are below current futures prices. “Net farm income has dropped by 31% since 2022, marking the largest two-year decline on record.”
• High fertilizer and seed costs, further squeeze farmer profits. Fertilizer costs continue to be affected by a volatile global supply chain and energy market. Additionally, 30% of U.S. farmers rent their land.
• USDA data reports that 85 cents of every farm dollar goes to the middlemen (processing, packaging, and transportation).
• Beef producers benefit from record-high prices ($8.50/lb), partially supported by innovations in dairy-beef crossbreeding; “The first time the dairy industry is helping the beef industry get additional supply.”
Space Testing vs
Soil Testing
4. Future of U.S. Agriculture:
• Enhanced understanding of soil and soil fertility should be a critical focus, leading to my favorite quote from the article:
“As I watch Elon Musk land spaceships, I think, we know more about what is 200 miles above our heads than what is two feet under our shoes.”
Well said Dan!
#fertilizer #AgResource
(Source: “U.S. Farmers Are Struggling. They Will Lose More in a Trade War, This Ag Expert Says”, Debbie Carlson, Barrons, 28 Nov 2024)