Possibility of Increasing Chinese Trade Boosting Farmer Optimism

CHICAGO, IL – Federal Reserve Bank of Chicago reports the prospects of a trade deal with China created some optimism in the farm sector during the fourth quarter of 2019. One contact called the potential deal a “key market driver.” The final results for the 2019 harvest varied from average to well below normal across the District, yet they were better than had been expected in light of poor weather during both planting and harvesting. Corn and soybean prices moved higher, with both prices above year-ago levels. That said, lower-than-usual corn quality and higher-than-usual drying costs cut into crop farmers’ profits. Overall, with extra government payments boosting farm income, the District’s agricultural sector was in about the same financial shape as it was a year ago. Increases in milk and cattle prices provided a boost to dairy and livestock producers.