U.S. farmers are stuck in quagmire as they face difficult decisions in the coming weeks.
Muddy fields and rainy forecasts continue to slow spring planting of corn and soybeans, leaving farmers far behind schedule across much of the Midwest. Even if they can get crops into the ground, late-planted corn and beans often suffer from lower yields, which could reduce U.S. harvests this year.
Meanwhile, signals from Washington, D.C. have been confusing, as farmers have been trying to navigate low prices due to ongoing trade wars.
This week, rumors floated that there would be another $16 billion bailout paid to farmers this year, with the government paying $2 per bushel for soybeans, 63 cents per bushel for wheat, and 4 cents per bushel for corn. If payouts were made this way, farmers might find that soybeans are far more profitable and increase soybean acreage wherever possible, adding to a glut of beans.
However, the U.S. Department of Agriculture warned, “we want to be clear that the program is being designed to avoid skewing planting decisions one way or another,” possibly signaling that payments would be made on county-wide averages, not an individual producer’s production.
Due to the bad weather and expectations for more corn and less soy, corn traded near $4 per bushel, a one-year high, while soybeans fetched $8.30 per bushel, near the recent 10-year low.
Brexit saga continues
Great Britain’s Prime Minister Theresa May announced her resignation this week, creating even more chaos in the ongoing Brexit saga. She had been elected to oversee Great Britain’s exit from the European Union but has been unable to negotiate between her Conservative Party hardliners and E.U. diplomats.
With her exit, it seems more likely that Great Britain will leave the E.U. without a pre-negotiated plan, which could have devastating impacts on the British economy.
On these fears, the British pound fell to the lowest level of the year, trading near $1.27 on Friday.