U.S. farmers are optimistic about both their financial futures and President Trump’s win in November.
A new survey from FarmProgress shows that 68 percent of respondents said they expect the next two decades will be profitable for agriculture – a 2% increase from the year prior. Fox Business reported that the optimism about Trump’s trade policies increased after the administration signed a phase one trade agreement with China last month.
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“The signing of the Phase 1 trade agreement between the U.S. and China in the week prior to the survey being conducted added optimism to farmers’ sentiments about the President’s trade policies,” says Farm Futures market analyst Jacqueline Holland.
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Approximately three-quarters of farmers thought Trump’s tariffs would pay off for the farming sector in the long run. The U.S.-Mexico-Canada Trade Agreement is also expected to lift U.S. agricultural exports.
“Farmers are slightly optimistic about commodity prices after direct farm program payments supplemented farm profitability last year,” says Holland. “While Market Facilitation Program (MFP) payments are currently off the table for 2020, cash receipts are expected to rise by 3% from last year as trade relations with China improve. Increased price volatility so far this year has paved the way for more profit opportunities than 2019.”
Holland added that “low interest rates will help ease farm expenses in 2020, despite tightening repayment capacity throughout the agricultural production sector.”