With low prices for corn and soybeans and reduced exports to China, U.S. farmers have concerns over future earnings. This is illustrated by the sharp drop in the purchase of tractors and combines generally regarded as a barometer of confidence in the future. Year to date, tractor sales are down by 11.7 percent and combines by 17.3 percent. The situation in June showed a sharper deterioration with tractor sales down 16.1 percent to 22,870 units and self-propelled combines down 31.0 percent to 463 units. John Deere has laid off 1,000 workers and will announce a further reduction in the complement of ‘white collar’ employees in August.
Agricultural exports to China will most certainly be a victim of any punitive tariff policy imposed by a future administration. Intended action if not political rhetoric will further complicate trade to the detriment of agriculture and consumer spending.
The impasse in both the House and Senate Agriculture Committees is delaying the passage of the 2023 Farm Bill. The extension adopted last year will expire in September with deadlock over issues including SNAP payments and eligibility and support payments. Both the Chairs of the respective House and Senate Committees are suggesting that the Farm Bill be passed to the 119th Congress in 2025.