The economic book is closing on 2018, and Dr. David Kohl, Professor Emeritus at Virginia Tech University, said several elements shaped the landscape. In an article written for Corn and Soybean Digest, he said the agriculture industry is in the sixth year of what he refers to as a reset, also known as a “grinder.”
He says the elongated poor economic conditions are taking a serious toll on the well-being of those involved in the ag industry. Some segments are facing more difficulty than others. A good example is the dairy industry, into its fourth year of low prices, leading to a serious loss of equity and producers exiting the industry. Production in the pork and poultry industries has greatly expanded.
The result is a large supply of product on hand, what economists are calling a “Great Wall of Protein.” International trade agreements and stronger domestic demand will be important moving forward into the new year. The beef industry has led the way with an increase in demand after years of decline.
However, the demand increase is showing signs of growing softer. The grain and crop sector had good production but not good profits. The health of the U.S. economy, the status of international trade agreements, and the strength of the U.S. dollar will all be keys to moving ahead in 2019 and beyond.