Friday, January 10, 2020

Tariffs and agriculture
Despite another year of international trade conflicts, research from the University of Tennessee Institute of Agriculture outlines the continued economic strength that the agri-forestry industrial complex provides to the state of Tennessee. Detailed analyses from the Department of Agricultural and Resource Economics are included in the 2020 volume of An Economic Report to the Governor of the State of Tennessee. The agri-forestry industrial complex encompasses the supply chain from farm and forest to consumers of the end products and is a vital part of the state’s economy. The complex directly and indirectly contributed an estimated $81 billion to the Tennessee economy and supplied 342,000 jobs. Farming operations occupied 10.9 million acres in Tennessee, which is around 40.5% of the state’s nearly 27 million acres of land area. Approximately half of this farmland is operated as cropland. Tennessee’s largest row crops are corn, cotton, soybeans and wheat. For many, 2019 was a challenging production year, with wet planting conditions, followed by a late-season drought across a large portion of the state. Wet conditions and the flooding of the Mississippi River caused 106,684 acres of corn, cotton, soybeans and wheat in Lake, Dyer, Lauderdale, Tipton and Shelby counties to be prevented from planting. Farm receipts from crops and livestock in the state was more than $3.5 billion, with $1.4 billion from animals and $2.1 billion from crops. The largest value of farm receipts was derived from soybeans, followed by cattle and calves. However, net farm income was $297 million in 2018, a decline from $1.4 billion in 2013 but an increase from the low of $203 million in 2016. “Trade disruptions have resulted in reduced access to markets for U.S. agricultural exports, especially China,” said Andrew Muhammad, who holds the Blasingame Chair of Excellence in Agricultural Policy at the UT Institute of Agriculture. “Trade restrictions and tariffs have a negative impact on the prices Tennessee producers receive for their commodities.” Average soybean prices are 4.3% below the five-year average and 5.3% above 2018 prices; wheat prices are 1.5% above the five-year average and 1.9% below 2019 prices; and cotton prices are 1.4% below the five-year average and 9.3% below 2018 prices. In fiscal year 2019, Tennessee exports were $1.4 billion, down 4% when compared to the previous fiscal year. This overall decline was, in part, driven by a decline in exports to China, which were down by 37%. However, some export relief is expected following the recent trade agreement with Japan that will provide improved access to the Japanese market. Beginning January 1, the 38.5% tariff on U.S. beef will gradually fall to 9% over a 15-year period. Pork, poultry, wheat, cheese and ethanol are among the commodities affected by this trade agreement. Japan is currently the third largest market for U.S. farm exports. Canada and Mexico are among the most important markets for U.S. agricultural exports, and these exports are also expected to increase. Agricultural exports to Canada are expected to increase by $400 million to $21.5 billion, and exports to Mexico are expected to increase by $500 million to $19.8 billion. Despite current trade tensions, U.S. agricultural exports to China are also expected to increase by $200 million to $7.5 billion, due to expected higher demand for imported pork due to African Swine Fever.

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Tuesday, July 07, 2020

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    Friday, July 03, 2020

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