4 Predictions for the 2019 Agricultural Market
As it tends to do once each winter season, the calendar has flipped over to another new year. Welcome, everyone, to 2019! Based upon the early “feelings” from agricultural market watchers, 2019 could be the year when the industry emerges from what some have called the “ag recession.” Or it might take one more year, occurring well into 2020.
Regardless, many others have tried their hand at predicting what developments will drive the agricultural market during this growing season. So here’s my attempt at this kind of prognosticating.
New dicamba label questions will be answered. When the EPA released its new label requirements for dicamba on Oct. 31, it created somewhat of a firestorm with certain ag groups. According to the new label, only certified personnel can apply dicamba. But reading between the lines a bit, it also sounds like, without proper certification, no one at a retail outlet is allowed to mix or handle dicamba. Ag retailers, state association heads, and EPA have been discussing this issue at length, so I expect some form of clarification on this matter before spring rolls around.
The quest for CDLs will become more desperate. During several winter trade shows, ag retailers have repeatedly mentioned how hard it has been for them to find and keep workers with commercial drivers licenses (CDLs). In fact, one retailer mentioned that, based upon the numbers, there is currently a nationwide shortage of CDL holders to the tune of 63,000. “And this is expected to climb to more than 100,000 within the next few years,” he said.
More corn will be planted. In 2018, for the first time since the years when Ronald Reagan was president, there were more soybean acres planted across the country than corn. In part, many growers reportedly made the switch to soybeans to “cash in” on higher commodity prices, especially with strong export demand from countries such as China.
But then the trade tariff war between the U.S. and China began. Quite quickly, China stopped buying U.S. soybeans and commodity prices tanked. With this situation still mostly unsettled, many analysts expect corn acreage to make a comeback in 2019 vs. soybeans, easily topping the 90 million acre mark. This ultimately could bode well for the fertilizer marketplace as well.
Grower-customers might struggle with finances. At the end of 2018 a report surfaced that said Chapter 12 bankruptcy filings for the year had “doubled” in the Upper Midwestern states from the year before. Many other speakers at the winter trade shows added that obtaining farm loans for 2019 “will become increasingly difficult for many growers.”
Other surprises will pop up. In addition to these “likely” developments, there will also be one or two key issues/challenges that occur during 2019, as tends to happen each and every year. As always, stay tuned …