Ag Economy Outlook 2018: More of the Same

Clements: Farm Bureau members concluded the 99th Annual American Farm Bureau Federation Convention expecting to tackle a similar ag economy as seen over the last few years. AFBF market intelligence director John Newton says producers should expect more of the same, with flat prices through 2018.

Newton: It is a situation where we're looking at more of the same. Prices have been in this relatively flat range for quite a while. I'd say the only star of the show so far for the last two years has been cotton. Cotton exports in 2016 were well above the prior year levels and again in 2017. This marketing year, cotton exports are off to a pretty hot start and that's led to some optimism in that sector.

Clements: For farmers navigating the flat markets, he says they should consider when there are good opportunities to market crops.

Newton: We're in a flat price environment and so to think about how you cut costs and be more efficient in this low-price environment is critically important. Farmers are burning down equity, they've been doing that for a number of years. So, the most important thing to think about is when are there good opportunities to market your crop and use risk management tools to protect against even lower prices.

Clements: Newton says there are several wildcard factors that could change the market trends this year.

Newton: We're doing NAFTA 2.0, to continue to monitor the status of those trade agreements. There are a variety of other factors, for example, the administration made some announcements on Pakistan. Pakistan is the third largest buyer of cotton than the United States. So, there are always black swan events that can lead to higher grain markets and create opportunities for farmers.

Clements: Micheal Clements, Nashville.