Where Will the Road Lead in 2019?

January 4, 2019 01:25 PM
 

There’s just something about country roads. One of my favorite places in the world is the old dirt road at my parent’s house in Iowa. Growing up, we’d jump in the back of grandpa’s truck and head down the dirt road when dusk approached to check the cows and drive through the timber. Looking back, I now see that it wasn’t the destination, but rather the process to get there that made those dirt road adventures so much fun. The people I journeyed with and the conversations we shared made those trips so memorable.

Today, my country road is a little different. This Illinois road I live on is the one my kids and I take long walks on. It’s the road where Harper learned to skip. It’s the road Hunter and I jam out on during the drive home from wrestling practice. It’s the road that Olivia runs mile after mile alongside. It’s the road I watch to see my husband approaching home each night. And yes, it’s the road our pony decided to take when she escaped from our barn after someone forgot to latch the gate. It’s a road full of new memories for me.

road

Roads remind us of where we’ve been and show us where we’re going. They symbolize new possibility. In the pork industry, we have good reason to be optimistic as we look down the road to see what’s ahead in 2019. Despite uncertainties surrounding trade and the economy, many experts say we have reason to be hopeful.

Trade Conflicts Cool
“I’m optimistic that we will get these trade differences settled,” says Chris Hurt, Purdue University agricultural economist. “The signing of the U.S.-Mexico-Canada (USMCA) trade agreement calms trade conflicts with Mexico and Canada, although it still needs approval in each country.”

Hope for a cooling of the trade conflicts with China are potentially supportive to hog prices, too.

“China needs food, so if we come up with a big trade package with China that says they’ll buy $70 or 80 billion in total goods from the U.S., some of that will be ag and some will be pork,” Hurt says. “I think that feels pretty positive right now.”

But will that happen? 

“There’s an adage in the market that you buy the rumor,” Hurt says. “The rumor is when the prices go up on the talk that we may get a negotiated package with China. The fact is that it may not be as big a package as we hoped for, so you sell the fact. Buy the rumor and sell the fact. That is providing optimism at this point on the trade front.”

Economy Slows, Still Grows
In addition, the tone of the U.S. economy remains positive for 2019. Consumers are expected to have more money in their pocket with wage rates rising and unemployment at multi-decade-level lows. Hurt believes this will help meat consumption and domestic market opportunities.

“Although Wall Street is talking about the economy slowing down – it’s important to understand that does not mean the economy is going backwards, but rather the rate of growth is slowing down,” Hurt says. “For consumers, that’s still more money in their pockets.”

Admittedly, it’s hard to know where the road will lead us this year. If I can offer one bit of advice – enjoy the people on your journey. We can’t control where the road goes, but we can appreciate those traveling alongside us.
 

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