Business consolidation continues. The U.S. business world, including the food and agricultural sector, remain in a consolidation period, due in part to global competition. China and other countries, for their own economic, social, and political reasons, embrace varying levels of protectionism and nationalism as global governments increasingly shelter their business sectors through support programs.  

There will be a U.S. Chinese trade deal, probably sooner rather than later, but a short-term deal, not “The Deal.”

Global fiscal, monetary, and trade policy agreements between the U.S., China and other foreign governments will be open ended with policymaking a journey, not a destination.

Why will policymaking be a journey? Three key points related to this article:

Respect the 2019 Farm Business Environment

The U.S. and global currency, bond, equity and commodity markets continue in a realignment period. In all probability there will be periods of relative economic strength like we are currently experiencing in some sectors and periods or weakness with heightened uncertainty. Presently, global equities are reflecting some optimism, but that will likely change as the realignment period continues. Risk management through financial professionals is all important.  

Since business, production, and marketing headwinds will likely be formidable, producers want to be as efficient as possible because, unfortunately, one’s competition is next door, regional, national and global.

  Global commodity supplies formidable

Visualization through the accompanying prospective acreage and supply and demand slide show is all important to this article. I have replicated key slides and moved them at the front of the slide show, so please take the time to download and view.   

Key points to consider as analysts ratchet up analysis of the closing months of the 2018/19 marketing period and turn their attention increasingly to the 2019/20 marketing period are as follows:

Rice 2018/19:

Soybeans 2018/19:

Corn 2018/19:

Cotton 2018/19:

Wheat 2018/19:

The remaining 2018/19 and the 2019/20 U.S. rice, soybean, corn and wheat marketing periods appear to be retaining their ongoing characteristics of range bound and hostage to global governments’ policy disputes and central banks stimulative intervention activities. Cotton presently has slightly more favorable fundamentals, but time and final planting will provide a better picture.

Quite simply, it remains a highly challenging business environment, so one’s production, financial and marketing advisors will be most critical to one’s 2019 business success.

No Crystal Ball

Since no one has a crystal ball or knows the future, always consult an investment professional or professionals before making investment decisions. The world’s greatest speculators, investors and money managers are challenged by today’s global business environment.   

Source: Bobby Coats is a professor and extension economist in the Department of Agricultural Economics and Agribusiness, University of Arkansas System, Division of Agriculture, Cooperative Extension Service. E-mail: [email protected]. and is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.

Download Slide Show for charts and expanded details, Click Download Link

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