President-elect Trump is being sworn in as the next President. In the weeks since his election we have heard lots of posturing and speculation about what his Administration will undertake. It is important to realize we are now in a new era of what the media’s role will be in coming years. We have seen many news stories in this election cycle that have been questioned for validity and authenticity. In the past, journalism seemed to focus on being right and having multiple sources to confirm major changes or events. Today the focus seems to have shifted to being “first” with accuracy being an unfortunate casualty.
I have been asked many times how President Trump will affect agriculture in the next four years. Bottom line, I don’t know. There is a reason for the delay in the selection of the Secretary of Agriculture. President Trump has interviewed many people for this position. He knows nothing about agriculture and wants to place the best possible person in that huge role. USDA has employees all across the country. Trump wants to see spending cut across all levels of government. Cutting spending means reducing people. It also means cutting food stamp spending, which accounts for at least 70% of the USDA budget.
The early successes or failures of presidential administrations are often measured by the barometer of what they accomplish in their first 100 days in office. During that time we can see what their major focus has become and how that will be carried out. We have heard plenty of posturing of what his focus should be. At the recent ADMIS Brokers conference last month, David Hightower of the Hightower Report suggested that President Trump needed to focus on two major items: tax reform and stimulating the economy. Those would be measures that can be outlined and worked through the halls of Congress in months, not years. In other words, don’t do the hardest things during the first weeks of office. The analogy I would draw is similar to a newly minted quarterback for a football team. The coaching staff outlines the game plan with simple things that can be accomplished. Using the long bomb, “going for the fence” pass plays are not seen in the first few series of plays. As simple plays are successfully completed, the new quarterback gains confidence in leading the team. More can be expected as time passes. If President Trump focuses on very complex issues as his first priority, he quickly becomes bogged down with very little accomplished. He is a successful businessman programmed to see results. Momentum and capital will be forfeited, and likely to be very difficult to regain at later dates.
In the next 90 days producers can expect a plethora of news events to drive the grain markets, including but not limited to, Trump announcements, weather, money flow, South America, and China. U.S. producers are most concerned about the mid-January announcement by China of imposing import tariffs on DDGs imported from the U.S. While the import tax or higher tariffs did indeed happen, China’s imports of U.S. DDGs have been slowing since last summer. In addition, those imports are dramatically below levels seen three or four years ago. While not welcomed, the import tax implications are not a death sentence for corn.
Cash rents and input costs will consume many of Ohio’s producers in the next 60 days. Input buying is reaching the final stretch for producers. They are fine tuning costs as the final planting mix for 2017 corn and soybeans nears completion. Those who have negotiated flexible rents based on commodity prices are seeing benefits to the bottom line.
USDA estimated Argentina’s soybean production at 57 million tons. With the heavy rain extremes in late December and early January, don’t be surprised to see that number declining in coming months.