DENVER, Colo. — The U.S. economy is still performing well by most key measures. However, consumers, investors, companies and other market participants have become more wary about the near- term future with seemingly good reason. Global and U.S. economic prospects are weakening and the agricultural economy shows few signs of an imminent comeback, according to a comprehensive 2019 outlook report from CoBank’s Knowledge Exchange Division.
CoBank is a $128 billion cooperative bank and a member of the Farm Credit System.
“Trade uncertainty, rising debt levels and market volatility are threatening to derail the global economy and creating difficult operating environments for U.S. agriculture,” said Dan Kowalski, vice president of CoBank’s Knowledge Exchange Division. “Trade is the outsized risk. Unresolved disputes with Mexico, Canada, Europe and China are the greatest collective threat to the U.S. economy in 2019.”
The CoBank outlook report examines 10 key factors that will shape agriculture and market sectors that serve rural communities throughout the U.S. These include:
- Global Economy: Trade-Induced Slowdown to Hit U.S Shores
- U.S. Economy: Slowing Growth, Accelerating Risk
- Monetary policy: Thinning Margin for Error
- U.S. Government: Split Congress, More Opposition
- U.S. Farm Economy: Higher Costs and Debt to Hamstring Producers
- Ag Trade Policy: Seeking Resolution
- Grain, Farm Supply and Biofuels: The Rise of Competition
- Dairy and Animal Protein: Output Grows Again
- Rural Electricity: Data Analytics Become a Necessity
- Rural Communications: Electric Co-Ops Gain Appetite for Broadband
The global and U.S. economic prospects are weakening and the agricultural economy shows few signs of an imminent comeback. There are silver linings, however, and many of them hinge directly on the prospect of favorable trade developments, particularly with China.
“There is a 50% probability that some form of a deal with be struck with China by the second quarter of 2019,” said Kowalski. “Also, there’s a 50% probability that most or all the tariffs will be lifted on U.S exports in the first half of the year. Should that scenario develop, our outlook will improve considerably.”
The report, “The Year Ahead: Forces That Will Shape the U.S. Rural Economy in 2019” is available at cobank.com.