Since our trade partners began applying retaliatory tariffs on U.S. agricultural products, the industry has experienced a significant amount of uncertainty, price fluctuation and disrupted trade markets. For some already harvested commodities, like cherries, the impacts of lost sales and depressed prices are well known. For other crops, like soybeans and corn, the impacts of current trade activities have been felt acutely by those who have sold in the spot market over the summer or watched helplessly as futures contracts swung wildly, but the feeling that the worst is yet to come hangs over producers. The consensus is that the impact of lower prices and weak demand from some key foreign customers will be most widespread as the combines roll and harvest 2018 gets underway.
Harvest progress continues to climb northward, with many of the Southern states finishing up corn harvest and getting started on soybeans. As Southern farmers deliver their corn or put the grain in storage they are certainly feeling the impact of low prices, but thankfully they have positive basis on their side. However, as harvest moves north we enter negative basis territory. This isn’t a new condition, but it will certainly be felt more acutely in this trade-impacted, low-price year.