JP Morgan Calls U.S. Ag Fundamentals “Rapidly Deteriorating”

May 14, 2019 12:13 PM
JPMorgan analyst Ann Duignan sent a note to investors saying U.S. agriculture faces a three-pronged crisis that will impact farm income.

America’s largest bank says U.S. agriculture faces a three-pronged crisis. JPMorgan analyst Ann Duignan sent a note to investors yesterday calling the fundamentals of agriculture “rapidly deteriorating.”

The three-pronged crisis of declining exports, a poor crop of corn and soybeans and the trade war with China, have created “a perfect storm for U.S. farmers,” Duignan says. Besides tariffs, Chinese import demand for soybeans will likely decline due to the approximate 30% loss of its hog herd after the outbreak of African swine fever (ASF).

Duignan also noted Brazil and Argentina have produced a near record soybean and corn yield, while the U.S. dollar strength remains a headwind for global trade.

“As a result of tariffs and excess global supply, US soybean export inspections are down 27%” year over year, Duignan said. She added that, at the same time, South America is having a banner year for production so “the export market is growing ever more competitive.”

Domestically, “the Midwest is off to a very slow start in 2019/20,” Duignan said. The planting season is “off to a bad start,” and corn and soybean crops are far behind in “planting progress” compared with last year, she said.

J.P. Morgan Chase & Co. is an American multinational investment bank and financial services company headquartered in New York City. JPMorgan is the sixth largest bank in the world with total assets in 2018 of $2.53 trillion.

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Spell Check

Ed Brannon
Nashville , TN
5/16/2019 12:39 PM

  The American farmer is no different in the eyes of the GOP and the Trump administration than trade unions. The faster the private farmer is gone and farms become property of mega corporations the better in their view. All the time they fill you with the urban woes they say are ruining the country so you don't think that they are coming after you. Wake up rural America, it is not the urban areas and their citizens that's your enemy.

Michael M.
Dahlonega , GA
5/15/2019 07:40 AM

  Gregg-You hit the nail on the head.

morris, IL
5/14/2019 07:01 PM

  I hope the American farmer wakes up and understands tariffs are no-win economics. There are many other approaches Trump could have taken to curb trade issues with China, but in true Trumpian I Know Best, he decided to go with tariffs against the advice of some of the best economists and historians in the world. The art of the this tariff deal is a bust not only for farmers, but for the American consumer. Until Trumps base starts to spend a little time truly understanding global market and not just accepting what Trump states is his facts, more damage will continue in America's farmland.


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