The Midwest farm economy in the Tenth Federal Reserve District weakened in the first quarter of 2017, but conditions varied from east to west. The Kansas City Federal Reserve Bank’s Agriculture Credit Conditions survey reports farm income, loan repayment rates, and the value of most types of farmland all trended lower in each of the districts seven states. However, the deterioration in the western portion of the district was more severe than the moderate weakness in the eastern portion. The district includes Colorado, Missouri, Kansas, Nebraska, New Mexico, Oklahoma and Wyoming. Since 2014, following a drop in the prices of major row crops, farm income has fallen more sharply in the Mountain States and the western portion of Nebraska, Kansas and Oklahoma. According to the survey, the gap between the two regions widened during the first quarter of this year. Alongside persistent weakness in cattle and wheat markets, more than 80 percent of bankers indicated farm income was lower than a year ago in the western part of the district versus about 60 percent in the eastern part.

Agriculture Secretary Sonny Perdue’s announcement of a USDA undersecretary on trade was met with open arms by farm groups. The Department of Agriculture will be reorganized to include a trade secretary. He made the announcement to the public during a tour of a grain shipping facility in Cincinnati, Ohio, Thursday afternoon. In a letter to Senate Agriculture Chairman Pat Roberts, Perdue said the move follows “Congress’s directive in the 2014 farm bill.” Congress directed USDA to establish an undersecretary for trade and foreign agricultural Affairs and realign the Foreign Agricultural Service to report to the new trade undersecretary. Perdue also announced the creation of an undersecretary for Farm Production and Conservation, which will oversee the Farm Service Agency, the Natural Resources and Conservation Service, and the Risk Management Agency. The reorganization also includes eliminating the Rural Development Undersecretary, having the division report directly to Secretary Perdue. In the letter, Perdue stated: “This realignment will re-orient our approach to serving producers and improve our responsiveness to the needs of producers.”

Agriculture Secretary Sonny Perdue will take part in a House Agriculture Committee hearing next week on the rural economy. The House Agriculture Committee will hold the hearing next Wednesday, May 17th. The hearing seeks testimony on how the rural and farm economy is holding up amid a downturn in farm income and commodity prices. House Agriculture Committee Chairman Mike Conaway notes that the farm economy is in the midst of a four-year, 50 percent decline. He says Secretary Perdue will share his perspective on the economic outlook in rural America, along with his vision for USDA and the role it will play in ensuring that our country “continues to enjoy the safest, most abundant, and most affordable food supply in the world.”

U.S. agriculture stands to lose big if a trade dispute with Mexico or Canada surfaces. CoBank CEO Tom Halverson told Bloomberg News recently that agriculture is in a “vulnerable position.” President Trump withdrew the U.S. from the Trans-Pacific Partnership and is vowing to renegotiate the North American Free Trade Agreement. However, as Halverson point out, Mexico is considering Brazil and Argentina as potential trade partners for corn. He says the prospect of a dispute with a major trading partner like Mexico is the last thing that many farmers, ranchers and grain handlers in the U.S. would like to see right now, adding agriculture has already suffered through several years of low commodity prices and a strong dollar, which has made overseas sales tougher. He cautions that weak prices are affecting some agribusinesses that borrow from CoBank, and that’s starting to impact credit quality, and suggest that trade problems could put further pressure on cash flow and credit quality.

A new poll released by the Pew Research Center says American’s view of the North American Free Trade Agreement is more negative than other NAFTA partner countries. The research shows that about half of U.S. citizens say the trade agreement is good for the U.S., while 76 percent of Canadians say the agreement is good for Canada. Meanwhile, 60 percent of Mexicans call the agreement good for Mexico. The research indicates that the differences in views may in part reflect the fact that both Canada and Mexico run merchandise trade surpluses with the U.S. In 2016, the U.S. ran a collective $74 billion trade goods deficit with its two NAFTA partners. Political partisanship is linked to views of NAFTA, most notably in the U.S. About two-thirds, 68 percent, of Democrats see NAFTA as good for the U.S., while only 30 percent of Republicans hold the same view. However, public support for NAFTA is somewhat higher today than it was in 2005, the last time Pew Research Center and Gallup regularly polled about the agreement.

Canada is exploring retaliatory options after the Donald Trump administration announced tariffs on Canadian softwood lumber last month. Canada’s Prime Minister Justin Trudeau is exploring ways to push back against the United States, although what options Canada is considering remain unclear. A trade official from Canada called the move normal, according to Politico. The remarks came after Trudeau over the weekend said he is considering “carefully and seriously” a request from British Columbia Premier Christy Clark to ban U.S. shipments of thermal coal through Canadian West Coast ports. The U.S. softwood tariff was an indirect response to a change in dairy policy that impacted U.S. dairy exports to Canada.

ASA and Valent USA are pleased to announce the Soy Leaders of the Future program, a new opportunity for young people interested in improving their understanding of major policy issues that impact soybean farmers, the importance of advocacy, and careers that can impact agricultural policy. The first class will take place this summer and will be held in conjunction with the ASA Board Meeting and Soy Issues Briefing, July 10-13, in Washington, D.C. The U.S. agriculture industry needs more leaders in Washington, D.C. who understand the needs of farmers and the agriculture industry, especially as it relates to the development of policies and regulations that impact farm productivity. The proportion of rural congressional districts is at its lowest point in history. An analysis of the most recent U.S. Census data, correlated with the 2012 Census of Agriculture, shows that only one of 435 districts in the U.S. House of Representatives is comprised of a rural population greater than 75 percent.* In fact, more than half of the U.S. population currently resides in 39 of the nation’s largest cities. As a result, positions on Congressional staffs, regulatory agencies and services groups within the Federal government are often filled with individuals who have a very limited understanding of farming and the needs of the agriculture industry. The new Soy Leaders of the Future program, sponsored by Valent and ASA, is designed to expose young people with a connection to the farm to an education on major policy issues and advocacy, and encourage these future young leaders to consider careers in within agriculture associations and industry, as well as government regulatory and legislative positions.

Another study suggests that dairy fats do not increase the risk of heart attacks and strokes. The Study, published in the European Journal of Epidemiology, concluded that consumption of dairy fats had a “neutral” effect on human health. A researcher leading the study at England’s Reading University said: “There’s been a lot of publicity over the last five to ten years about how saturated fats increase the risk of cardiovascular disease and a belief has grown up that they must increase the risk, but they don’t.” The study combined other research projects from the last 35 years that involved more than 900,000 people. The study says no associations were found that led them to believe consumption of dairy fats led to increased risks of mortality or heart disease. The research instead suggested that fermented dairy products may actually lower the risk of having a heart attack or stroke. The study is one of many recent research projects that have determined dairy fats are good for humans, reversing previous thinking by the scientific community.