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Election Day. Vote!... Today is Election Day, with tight races for the presidency and House, while Republicans are expected to gain a slight majority in the Senate. If you have not done so already, Pro Farmer encourages you to vote.
Another hefty ag trade deficit in September... U.S. agricultural exports totaled $13.13 billion in September against imports of $17.39 billion, resulting in a monthly trade deficit of $4.26 billion. Fiscal year (FY) 2024 ag exports totaled $174.43 billion, while imports tallied $206.21 billion for a record deficit of $31.78 billion. That was above USDA’s forecast of $30.5 billion and up sharply from $17.1 billion in FY 2023. The sector recorded monthly deficits in 11 out of 12 months in FY 2024, with four months seeing deficits of $4 billion or more.
For FY 2025, USDA forecasts ag exports will fall to $169.5 billion and imports will rise to $212 billion, which would result in the trade deficit rising to a record $42.5 billion.
U.S. trade deficit widens to nearly 2.5-year high in September... The U.S. trade deficit widened 19.2% to $84.4 billion in September, the highest since April 2022, falling from a downwardly revised $70.8 billion shortfall in September. Imports increased 3% to a record $352.3 billion, while exports declined 1.2% to $267.9 billion after reaching a record high in August.
Trade subtracted 0.56 percentage point from U.S. GDP in the third quarter and has been a drag on economic growth for three straight quarters.
Farmer sentiment rebounds in October... The Purdue University/CME Group Ag Economy Barometer index climbed to a reading of 115 in October, up 27 points (19.3%) from September and five points (4.5%) above year-ago. The biggest driver of improved farmer sentiment was an increase in producers’ confidence in the future, as the Future Expectations Index jumped 30 points to 124. The Current Conditions Index also rose in October but by a smaller amount. At 95, the current conditions reading conveys that farmers think economic conditions are worse than last year and weaker than during the barometer’s base period of 2015-2016, which was in the early days of a multi-year downturn in the U.S. farm economy. Producers this month expressed some optimism that economic conditions will improve and not precipitate an extended downturn in the farm economy.
The Ag Barometer noted: “One of the most surprising findings from this month’s survey was the increase in the Farm Financial Performance Index. This index measures producers’ expectations regarding their farm’s financial performance over the next 12 months compared to the past year. In October, the index surged to 90, reflecting a 22-point jump from September and falling just two points shy of last year’s level. Though not solely accountable for the rise in the index, contributing factors likely include high fall crop yields and a stress-free harvest season in the Corn Belt and Plains states. The index’s improvement also suggests a growing optimism among farmers about their financial outlook, with expectations for better performance in 2025 compared to 2024. Producers seem to view 2024’s weak income prospects as transitory, as there was also a modest improvement in the Farm Capital Investment Index, which reached 42 — a seven-point increase from September.”
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Minnesota secures $5 billion SAF plant to propel decarbonization of air travel... DG Fuels announced plans for a $5 billion sustainable aviation fuel (SAF) facility in Moorhead, Minnesota, expected to produce 193 million gallons per year from agricultural and wood waste, creating 650 jobs and a projected $50 billion economic impact statewide. The 193 million gallons projected by DG Fuels would represent nearly half of the fuel used at the MSP International Airport.
FDA, EPA approve first antimicrobial treatment for pre-harvest agricultural water... FDA and EPA have registered the first antimicrobial product to treat pre-harvest agricultural water against foodborne pathogens like E. coli and Salmonella, a milestone aimed at bolstering produce safety and reducing foodborne illness risks.
ADM reveals more accounting errors... Archer-Daniels-Midland Co. said it will amend previous financial statements after uncovering accounting issues, prompting the company to cancel its quarterly earnings call on Tuesday. ADM said Monday evening it had identified additional errors in the way it reported sales between the Ag Services and Oilseeds, Carbohydrate Solutions and Nutrition business segments while testing new internal controls. After discussions with the Securities & Exchange Commission, ADM said it will amend financial statements for last year and the first and second quarters of 2024. It doesn’t expect any material impact from the revisions.
PBOC head vows to boost China countercyclical monetary measures... China’s central bank chief pledged to maintain an accommodative monetary policy stance and to double down on countercyclical adjustments to support the country’s economic growth. In a report on the nation’s financial work to China’s top legislative body, the National People’s Congress Standing Committee, People’s Bank of China (PBOC) Governor Pan Gongsheng suggested that keeping an accommodative monetary policy stance and increasing the intensity of countercyclical adjustments will create a sound monetary and financial environment for stable economic growth and high-quality development, state-run Xinhua news reported. Pan also underscored the need to actively prevent and tackle financial-system risks by strengthening regulatory oversight, the report added.
Earlier on Tuesday, as we reported in “First Thing Today,” Chinese Premier Li Qiang expressed confidence in the government’s ability to drive sustained economic improvement and reach its 5% growth target for 2024, as officials had “ample space for fiscal policy and monetary policy.”