Live Cattle and Hogs
February live cattle ended the day in the red, while January feeder cattle and February lean hogs closed higher. January crude oil is currently up $1.33. December S&P 500 futures and Dow futures are currently up 29 points and 465 points, respectively.USDA Export Sales
This morning, USDA announced new export sales. China is buying 198,000 metric tons of soybeans for the 2024/2025 marketing year. Unknown destinations are buying 135,000 metric tons of soybeans for the same marketing year. The Philippines are buying 133,000 metric tons of soybean cake and meal for the 2024/2025 marketing year. USDA also released the weekly U.S. Export Sales report. Regarding net sales for the 2024/2025 marketing year, The Brock Report stated: "Net U.S. corn export sales for the week ended Nov. 14 came in at 58.8 million bushels compared with trade expectations that ran 51-86.5 million bushels and the previous week’s 51.8 million. The sales total, which is toward the lower end of the range of expectation looks a bit disappointing." "Net weekly U.S. soybean export sales came in at 68.4 million bushels compared with trade estimates that ran 36.5-70 million bushels and the previous week’s 57.2 million. The soybean sales total looks supportive for soybean prices, but may not be enough to support them against continued pressure from South American production prospects and fears of a new U.S.-China tariff war…." "Net weekly U.S. wheat export sales came in at 20.2 million bushels compared with trade estimates that ran 10-22 million bushels and the previous week’s sales of 14 million bushels. The sales total looks supportive for wheat prices."Morning Market Updates
In the morning, March corn is down 1¼¢. January soybeans are down 4½¢. March wheat contracts are also lower. CBOT wheat is down 1½¢. KC wheat is down 3¢. Minneapolis wheat is down a penny. The U.S. Dollar Index December contract is down to 106.48. December S&P 500 futures are unchanged. December Dow futures are up 149 points.Unraveling the Effects of Commodity Price Decline on Farm Income
Impact on Purchasing and Loan Demand
Farmers have significantly reduced their capital spending. As stated by a South Dakota banker, "Most farmers are not purchasing or trading machinery at this time." This indicates a cautious approach by farmers in light of the economic conditions. Additionally, the increase in loan demand reflects the financial challenges faced by farmers in maintaining their operations.Regional Fed banks in Chicago and Kansas City have also reported lower farm income in their districts. Nationwide, ag bankers have observed a 40% increase in the volume of new operating loans compared to the third quarter of 2023. This highlights the need for financial support to help farmers navigate through these difficult times.
Survey Results and Expectations
Nine out of every 10 bankers participating in the Minneapolis Fed survey reported lower farm income during July, August, and September compared to the same period in 2023. A significant 83% of bankers expect lower farm income in the final three months of this year. The Minneapolis Fed's district, which covers Minnesota, Montana, North Dakota, South Dakota, the northern third of Wisconsin, and the Upper Peninsula of Michigan, is particularly affected.A Montana banker looking ahead noted that with high input costs and land rental rates, "2025 cash flows will be very tight and most likely net losses." This emphasizes the long-term challenges faced by farmers in the region.
Farmland Value Trends
Despite the decline in farm income, farmland values in the northern Plains have shown an upward trend, continuing a four-year pattern. Non-irrigated cropland values are 2% higher than a year earlier, irrigated cropland is up 3%, and ranchland and pastureland are up 1%.In the central Plains, bankers reported a 5% increase in non-irrigated cropland values from the third quarter of 2023. However, in the Chicago Fed district, which includes Iowa and most of Illinois, Indiana, Wisconsin, and Michigan, farmland values remained unchanged. This is the first period since the fourth quarter of 2019 without a year-over-year increase in district farmland values.
Unveiling Kelly Loeffler's Journey to the USDA Secretary Role
Background and Family Roots
Kelly Loeffler was raised as the fourth generation on her family's corn and soybean farm in Stanford, Illinois. Just 8 miles west of Bloomington, Loeffler Farms is now run by her younger brother Brian and his family. On the farm, she learned the values of faith, family, and hard work. Growing up, she worked in the fields and then waitressed her way through school. She was the first in her family to graduate from college, obtaining a BS in marketing from the University of Illinois and an MBA at DePaul University. After almost three decades in the automotive and financial service industries, she advanced to an executive position at Intercontinental Exchange and later launched Bakkt as its founding CEO.Even before her senate appointment in 2019, Loeffler had a diverse career in the private sector, creating jobs and making a mark in the business world.
Stance on Farm Bill
In the 2020 questionnaire, Loeffler emphasized the significance of the farm bill. She stated that it is the single most important piece of agricultural legislation regularly considered in Congress. Her top priorities for the farm bill were to ensure farmers have an appropriate safety net and bolster support given the current unfavorable economic conditions.She recognized the importance of safeguarding the interests of farmers and ensuring their livelihoods during challenging times.
Stance on Trade
Loeffler praised the previous Trump administration's trade negotiations and enforcement mechanisms with China and Japan. She believed that these trade deals should be strictly enforced and that foreign governments, especially the Communist Party of China, should not be allowed to grow their economies at the expense of American workers and farmers.Trump's proposed 60% tariff on goods from China, considering China as the U.S.'s leading agricultural export market, shows the importance Loeffler attaches to protecting American agriculture.
Ag Policy and Activity During Senate Tenure
In May 2020, Loeffler faced scrutiny when she removed herself from a role in the Senate Agriculture Subcommittee on Commodities, Risk Management, and Trade after making stock trades in February 2020 following a classified briefing on the coronavirus. However, she remained on the Senate Agriculture Committee and was later cleared by the Senate Ethics Committee and Department of Justice.During her tenure, she sponsored the American Farmers, Food Banks, and Families Act of 2020 to connect farmers with food banks during the COVID-19 pandemic. Although the bill was introduced, it was not enacted.
She also participated in announcing a $323,834 grant from the USDA National Institute of Food and Agriculture to the University of Georgia for research to improve crop protection and pest management. This shows her commitment to supporting agricultural research and safeguarding Georgia crops.
Industry Praise
Sonny Perdue, who served as the Secretary of Agriculture during Trump's first administration, praised Loeffler after her senate appointment. He recognized her understanding of the agriculture community's needs and her ability to bring that knowledge and experience to her work in the Senate.Perdue's words highlight Loeffler's credibility and potential to make a significant impact in the agricultural sector.