New Year Could Bring Balance Back to Markets

DENVER, CO – The fourth quarter is ending with much more optimism on trade and the economy compared to how it began. Washington has put together a year-end blitz on trade and immigration reform, setting up 2020 to start with a limited U.S.-China trade deal and ratification of the new U.S.-Mexico-Canada (USMCA) free trade agreement. Ag labor reform has also cleared the House and has the potential to become law in the first quarter of the new year. All three policies would be significant milestones for the general economy, rural economy, and the agricultural sector. According to CoBank, the grain, pork, dairy, specialty crop, and biofuel sectors have all been hurt by trade tensions with China. Reports indicate that China has agreed to purchase $40 billion annually of U.S. agricultural goods. This would be an additional $16 billion above the established benchmark of $24 billion exported in 2017. This commitment has yet to be confirmed by China, but if proven true, the benefit to U.S. agriculture would be widespread as soybeans would account for only a small portion of the increase. Improved agricultural exports would go a long way to bring balance back to these markets.