In the last two years, the United States has reversed the post-World War II trend toward the lowering of trade barriers and a commitment towards multilateral free trade. Citing a need to “level the playing field” and hold trading partners accountable to their commitments, the current Administration has moved towards a more protectionist and perhaps mercantilist position vis-à-vis trade policy. One of the Administration’s first actions in this regard was the decision to leave the Trans-Pacific Partnership (TPP) agreement, followed thereafter by raising tariffs on steel and aluminum imports. The Administration’s actions on trade are likely to have significant implications for U.S. farmers as these actions target three of the largest markets for U.S. agricultural exports – Canada, China and Mexico – accounting for some 44%, and representing an average of $63 billion, of U.S. agricultural exports 2013 to 2015

Last year at this time, many forecasters indicated the worst of the margin pressure appeared to be behind production agriculture. Farmers had achieved some success in lowering per unit cost of production.

The 2019 Purdue Crop Cost and Return Guide presents cost and return information for low, average, and high productivity soils. The discussion in this paper will focus on the estimates for average productivity soil.

With a record amount of soybeans to sell from the 2018 crop it is a bad year to jeopardize our largest buyer. The U.S. had record soybean yields and record total production in 2018 and also lost the opportunity to sell to China, our largest customer during their peak buying season.

Surprise! Corn prices are expected to be at their highest level in three years. The potential strength in prices is being led by record usage and declining inventories.

The year of 2018 did not turn out so well for pork producers as estimated losses were about $12 per head for farrow-to-finish operations. These were the largest losses since 2012 when high feed prices prevented positive returns. Pork production was up 3% in 2018. That was record high production as the industry has been in expansion since 2014.

Milk price trends make reaching break-even look bleak for many farms. Recent news media related to dairy farming in the U.S. has been difficult to even see or hear, let alone to actually live though on the farm. Untimely and delayed harvests in many parts of the U.S. make predicting feed costs difficult, in addition to the lingering questions about quality.

During 2018, changes in the retail price of food at home have remained low, averaging just 0.5% year- over-year growth over the past five years and 0.4% year-over-year growth thus far through 2018 according to data from the Bureau of Labor Statistics.

Headed into 2018 three policy areas stood out as crit- ical developments with potential to significantly impact the farm economy – international trade negotiations, immigration reform policy, and replacement of the 2014 Farm Bill. The 2018 calendar year saw significant political activity on all three issues, though only the Farm Bill replacement seemed to be firmly resolved.

USDA is projecting agricultural exports of $141.5 billion in fiscal year 2019, down from $143.4 billion in 2018. (Cooke and Jiang, 2018) Much of the expected decline in total exports is attributable to soybeans and cotton. Declining sales to China are expected to affect soybeans, while the lower forecast for cotton exports is linked to slowing growth in global demand.

Since March 2018 there have been more job openings in the U.S. economy than there are people searching for work. The limit on job growth is the availability of potential employees, not job opportunities. The U.S. economy has reached capacity.