Current Week

Optimism

February 13, 2019

Hello everybody out there in farm country.  This radio commentary is brought to you by the National Corn Growers Association, CropLife America, and Renewable Fuels Association. 

They are all friends, supporters, and allies of a healthy farm economy and prosperous rural America.  Thank you.

And now for today’s commentary –

Optimism is in the air.  Pessimism is being crowded out.  The second government shut down that looked like a certainty is not going to happen.  President Trump will not get the amount of money he wanted for a wall, but he gets enough to get started.  It will be argued that President Trump caved on the border security fight, but there is other money in the bill to improve security with new technology.  It’s time to move on to other priorities.

At the top of that list is a deal with China to end the costly tariff war.  U.S. Leadership including U.S. Trade Ambassador Robert Lighthizer and Treasury Secretary Steven Mnuchin are in Beijing negotiating this week.  President Trump has said he is prepared to delay the planned 25% increase in tariffs scheduled for March 1st if real progress is made.  There is reason to think that both U.S. and China want a deal.  Trumps AG supporters are getting desperate for more trade and the dispute is seriously hurting China’s economy with this stock market down more than 20%.  If our negotiating team in Beijing can reach a positive agreement, then President Trump and Chinese President Xi Jinping will meet at a later date.  Let’s keep our fingers crossed.

Last week the government released the carry over level of corn, soybean and wheat in storage.  Our farm corn stocks are down 4% from one year ago.  However, our farm soybean stocks are up 30% from last year.  On the plus side the grain in storage is still less than the trade expected.  I don’t predict any explosive price increase but a trade deal with China would help. 

This week I was at a luncheon where House Ag Committee Chairman Peterson spoke.  I have known him for years.  He is a great guy with common sense and good judgement.  He is optimistic about the new farm bill that we were fortunate to have passed last year.  It didn’t get tangled up in the government shutdown.  Ag Committees are usually not very partisan.  There was pressure to impose added work requirements on food stamp recipients, but that didn’t go anywhere.  Chairman Peterson was optimistic that the new farm bill will be good for agriculture and can be implemented quickly.  The Chairman has always worked with both parties.  He is a Democrat elected in a district that voted by a wide margin for Trump.

I like it when optimism rules over pessimism.

If you would like to review my radio shows going back more than 20 years, just go on-line to www.johnblockreports.com.

  Until next week, this John Block reports.

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