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The USDA now estimates this year’s net farm income, a broad measure of profitability in the agricultural economy, will hit US$140 billion in 2024, down 4.4 per cent, or $6.5 billion, from a year earlier. Adjusted for inflation, net farm income in 2024 is forecast to drop by $10.2 billion, or 6.8 per cent, from a year earlier. In February, the USDA forecast that net farm income would fall more than 25 per cent, or nearly $40 billion, from a year earlier, a record year-over-year dollar drop. USDA economists changed their estimates after gaining access to information unavailable for the previous forecast, such as the latest U.S. farm census, said USDA Economic Research Service economist Carrie Litkowski, who leads the agency’s farm income team. For example, fertilizer expenses are now expected to ease as crop farmers look to cut production costs. Meanwhile, cattle prices soared, dairy prices turned higher and the spread of avian influenza has led to supply constraints for eggs, Litkowski said. In fact, cash receipts for egg sales this year are expected to jump about 35 per cent, or $6 billion, the largest increase in the livestock and animal products group, USDA data shows. “In February, we did not anticipate that egg prices were going to rise as much as they had,” Litkowski said.
Founded in 1998, Algueira spans 30 hectares and produces up to 150,000 bottles per year. Come harvest season, temporary grape pickers, many from Eastern Europe, lend manpower to an operation that relies almost entirely on handwork. Around the turn of the 20th century, infestations of the sap-sucking pest Phylloxera virtually wiped out the region's ancestral varieties. The catastrophe led to widespread poverty, population decline and sparked waves of migration. After the death of dictator Francisco Franco in 1975, the Spanish government began granting subsidies to local farmers with old plots that retained pest-free specimens in a bid to recover the heirloom vines.
The United States is coming off one of its worst soybean export seasons in recent memory, with shipments rivaling those from a few years ago when the No. 2 exporter was locked in a trade war with top buyer China. Export sales of U.S. soybeans for 2024-25, which began Sept. 1, have been stronger than average over the past month as China has finally stepped in to make purchases.
But just two weeks into the new marketing year, total soy sales were at five-year lows and down 5% from this same time last year, when traders were also fretting over the disconcertingly slow pace of U.S. soy bookings. The light U.S. soybean sales are especially disappointing as the U.S. Department of Agriculture predicts global soybean consumption will reach new highs in 2024-25, driven by further expansion in soybean processing. Additionally, recent yearly growth in Chinese soybean demand is not as strong as the decade-ago rate may have implied. Top exporter Brazil has easily captured China’s soy business despite its crop falling well short of initial ideas in two of the last three seasons.
Beef: Net US sales of 15,500 MT for 2024 were up 36 percent from the previous week and 2 percent from the prior 4-week average. Increases were primarily for South Korea (3,700 MT, including decreases of 400 MT), China (3,000 MT, including decreases of 100 MT), Japan (2,900 MT, including decreases of 500 MT), Canada (1,500 MT), and Mexico (1,400 MT, including decreases of 100 MT). Total net sales of 800 MT for 2025 were for Japan. Exports of 16,400 MT were up 39 percent from the previous week and 22 percent from the prior 4-week average. The destinations were primarily to South Korea (4,400 MT), Japan (3,800 MT), China (2,700 MT), Mexico (1,500 MT), and Taiwan (900 MT).
Pork: Net US sales of 29,000 MT for 2024 were down 3 percent from the previous week, but up 3 percent from the prior 4-week average. Increases were primarily for Japan (7,900 MT, including decreases of 300 MT), Mexico (5,700 MT, including decreases of 500 MT), Colombia (3,300 MT, including decreases of 100 MT), Canada (3,200 MT, including decreases of 600 MT), and South Korea (1,900 MT, including decreases of 1,100 MT). Net sales of 100 MT for 2025 resulting in increases for Australia (200 MT), were offset by reductions for the Dominican Republic (100 MT). Exports of 31,400 MT were up 22 percent from the previous week and 12 percent from the prior 4-week average. The destinations were primarily to Mexico (12,600 MT), Japan (4,600 MT), China (3,800 MT), South Korea (2,400 MT), and Colombia (2,000 MT).
- Our balance sheet is showing a neutral balance for 2023/24 with a deficit in robustas and a surplus in arabicas. We expect a very modest all-arabica surplus in 2024/25. However, any supply-demand balance is dwarfed by the extra demand for coffee due to longer shipping times, container scarcity, port congestion, and higher appetite for stocks ahead of the implementation of the European Union Deforestation Regulation (EUDR). At the same time, Brazilian arabica trees are begging for some rain amid a prolonged dry period and a heatwave, impacting the potential for 2025/26.
- EU Q2 imports increased by a massive 12.6% YOY and 11.4% versus Q1. Q3 and Q4 will also likely remain high as the looming EUDR implementation is causing frontloading in many origins. With a market in backwardation, building stocks will come at a cost, but one that some European companies are reluctantly bearing in the light of the uncertainty surrounding the EUDR.
- We maintain a neutral outlook for most of the remainder of 2024 due to the EUDR, port congestion, scarcity of containers, and the Red Sea crisis – all factors that are difficult to quantify. However, low stocks and weather risk almost guarantee high volatility. The EUDR implementation could have a bearish impact from late 2024 and early 2025.
Commodities September 22
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