Post Market Wrap Up March 18
March 18, 2019
Post Market Wrap Up March 25
March 25, 2019

Post Market Wrap Up March 19

Headlines:

 In a Generation, Mega-Farms Will Dominate ‘Production’ Ag, Analyst Predicts

Twenty years from now, vastly fewer but much larger farms will generate the lion’s share of agriculture output, said chief executive Brett Sciotto of Aimpoint Research. Speaking at a farm conference on Monday, Sciotto said current trends in agriculture point to 100,000 “production” farmers in the country, one quarter or one fifth of the current crop of mid- and large-size farms that dominate the sector. It will be agriculture at large scale, with some operators active internationally, said Sciotto at the Food and Ag Policy Summit sponsored by Agri-Pulse. There would be room for small farmers to prosper by focusing on niche or specialty markets, but as a class, medium-size farms would collapse under the pressure of competing in a world where large operators hold an advantage. Looking to 2040, the market-research executive said federal support for agriculture might wither away. “The farm bill will become a food bill,” he said. Gene editing would be a mainstream technology. Mid-tier farmers will be under the greatest stress in the near to medium term, Sciotto predicted. Processors will simplify their supply chains by dealing with a limited number of high-volume producers who can reliably meet their specifications for quality and quantity. “Lots of mid-tier and smaller farms will be left behind,” said Sciotto.

Road Closures Cripple Flood Relief Efforts, Agriculture Around Midwest

Floodwaters have devastated parts of the Midwest over the last week, submerging roads and washing away pavement. Roads around the region have been closed, crippling relief efforts. The economic impact of the closures is already being felt by farmers, ranchers, and agribusinesses in the area. Schools are closed and mail deliveries have been suspended due to impassable roads and washed out bridges. Some areas of Nebraska went days with no passable routes in or out. State officials are working with National Guard and others to open as many roadways as possible and assess damage. In an interview Tuesday morning, Jeni Campana, spokesperson for Nebraska DOT, said, “We don’t have an exact estimate, but it’s probably hundreds of millions of dollars in damage to the state highway system.” So far, the department has determined that 14 bridges in the state are not usable. “That means that they’ve either been washed out or approaches have been washed away so you can’t drive across the bridge,” Campana explained. Since the height of the flooding, some of the water has receeded. “We had over 1,500 miles that were closed because of water over the road. We’ve opened most of them back up,” she continued. “As of last night (Monday), we had about 500 miles that were closed because of flooding. We anticipate we we’re going to probably have around 200 miles of state highway system that is going to need to be repaired. It’s not just cleaning of the road. It’s going to actually require repair to get it up and running again.”

Summary:

US Agriculture Secretary Sonny Purdue, said that China could triple it purchases of US farm goods as part of a trade deal with the US over the next 2-4 years according to a recent Bloomberg report. Grain prices were largely unchanged today, with Corn and Wheat both finishing with less than 1 cent in losses. Soybean futures were down 2.50 cents. It continues to be a waiting game ahead of the March 29 report. It is of particular interest to see is the grain markets are able to post a high above last week’s high as the week closes out. In doing so, that would set the stage to potential price gains next week leading up to the report. If some strength is able to set in, we anticipate that a short covering rally could then follow sending prices significantly higher.