DENVER, COLORADO, U.S. — The U.S. agriculture industry continues to see uncertainty over trade policy, weather and African swine fever, causing increased volatility across the industry that is affecting producers, supply chains and end users, according to the latest Quarterly Rural Economic Review from the CoBank Knowledge Exchange division.

With multiple trade negotiations still in the works the U.S. ag sector is preparing for its second consecutive harvest under the shadow of tariffs. Lower feed prices, however, are aiding animal protein and dairy margins.

“Global trade tensions are ratcheting up as world economic growth slows,” said Dan Kowalski, vice-president of the Knowledge Exchange division at CoBank. “However, the new trade deal struck between the U.S. and Japan is a bright spot and will bolster U.S. agriculture’s competitiveness into a key export destination.”

The report noted volatile cash corn crop prices were volatile due to late planting of the U.S. corn crop.

“End users like ethanol producers and livestock feeders bid old-crop corn supplies higher in anticipation of a short harvest this fall, with prices falling back to levels seen prior to spring planting,” Cobank said.

Farmers continue to hold on to old-crop corn supplies in hopes that prices will recover in the months ahead on local supply shortages, according to the report. But globally, grain stocks remain ample and are widely expected to dull any significant rallies in corn if harvest reports confirm a smaller-than-expected U.S. crop.

“Soybean prices surged late last quarter based on fears of delayed maturity of the U.S. soybean crop and hopes of resuming China market access,” CoBank said. “In a sign of good faith ahead of negotiations, which are expected to resume in early October, China exempted U.S. soybeans from additional tariffs.”

Volatility in the U.S. animal protein market continues as it grapples with feed costs, capacity disruptions, trade flows and political disruptions. The impact of ASF on global pork supplies is just beginning to be felt in the U.S. animal protein sector.

“While prices have ridden a rollercoaster so far this year based on expectations, reality is now hitting,” CoBank said. “Trade volume is expanding and will begin to yield benefits to producers across the meat and poultry industries. The expanding trade volume, along with the signing of important trade agreements this summer with Japan and Mexico, will also aid in improving the sluggish level of trade flows so far this year. The new trade deal with Japan also lifts hopes of renewed exports.”

CoBank is a cooperative bank serving agribusinesses, rural infrastructure providers and Farm Credit associations throughout the United States.