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Economic Trends 2017: Trump's Impact on Agriculture & Infrastructure

Explore the economic outlook for 2017 under Trump's presidency, focusing on the agriculture sector, infrastructure investment needs, trade agreements, and policy implications. Learn about the tug-of-war between Trump, the Federal Reserve, and key trading partners, and how it affects the general economy. Gain insights into the potential impact on farm asset values, farm income, and government budgets. Stay informed on the changing landscape of trade, regulations, and budget appropriations.

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Economic Trends 2017: Trump's Impact on Agriculture & Infrastructure

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  1. “Trumping” the Economy and Agricultural Policy Outlook Update February 2017 Larry D. Sanders

  2. The bottom line… • Dec 2016: • General economy in pretty good shape • Ag economy at crossroads facing crisis or resurgence • 2017: • Tug/pull between Trump and Fed • Regulation relaxation • Trade, foreign economies, energy markets & weather uncertain

  3. Leaving 2016 behind • Consumer spending and Gross Domestic Product are at record levels, while Federal government spending is down • GDP growth rate last quarter 3.2% • GDP debt to GDP remains high (104%) • Wage and salary growth have recovered from the 2008 meltdown (4.3%) • Federal deficit has declined • Inflation rate remains relatively low (1.6%; food price deflation) • $ has strengthened • Unemployment is down and more jobs are being created • U rate 4.6% • Interest rates low (0.5%) • Commodity prices are down after record years

  4. The General Economy in 2017:Tug/pull between new President, Federal Reserve, Congress & key trading partners • Fiscal stimulus: increase inflation • Monetary policy: limit inflation & slow growth in GDP • Deficit likely to increase • Foreign capital attracted to US investments • $ strengthens • Trade deficit increases • Unemployment may increase • Standard of living likely declines • Farm asset values likely decline and farm income will shrink • Reduced staffing in federal farm offices such as FSA and NRCS • Suggests longer waits/more difficulty to get assistance, benefits

  5. US Net Farm Income & Direct Government Payments (1991-2016F) $ Billion REVISED (113016) $66.9 b. $54 b $12.9 b. Note: OK producers received $1 bil. in direct govt. payments in 2014.

  6. US Infrastructure: a focus for public-private funding (As much as $3.6 trillion needed by 2020) http://www.infrastructurereportcard.org/a/#p/grade-sheet/americas-infrastructure-investment-needs

  7. https://www.washingtonpost.com/graphics/national/maps-of-american-infrastrucure/?hpid=hp_hp-top-table-main_gfx-infrastructure-320pm%3Ahomepage%2Fstoryhttps://www.washingtonpost.com/graphics/national/maps-of-american-infrastrucure/?hpid=hp_hp-top-table-main_gfx-infrastructure-320pm%3Ahomepage%2Fstory

  8. U.S. Agricultural Trade Lower Bulk Export Prices and Greater Export Competition 152.3 134 Records 114.2 112.5 Exports 43 Imports Trade Surplus Updated by Sanders

  9. http://www.fas.usda.gov/data/trade-agreements-create-opportunities-us-agriculturehttp://www.fas.usda.gov/data/trade-agreements-create-opportunities-us-agriculture

  10. 2016: GOP Red; Dem Blue Cartogram: map re-scaled according to vote within counties https://www.washingtonpost.com/2016-election-results/us-presidential-race/?hpid=hp_hp-bignews4_map-desktoppromo%3Ahomepage%2Fstory https://www.washingtonpost.com/graphics/politics/2016-election/how-election-maps-lie/

  11. Trump Policies Related to Ag & Rural America? • Limit immigration • Kill TPP; revisit all in-force trade agreements, esp. NAFTA • Kill/revisit climate change agreements • Expand infrastructure programs (roads/bridges) • Reduce regulations • Eliminate or reduce EPA • Separation of farm programs and food/nutrition programs in next farm bill • With exception of Defense and ICE, general reduction of government—it will be smaller

  12. The next farm bill… 2018…2019…2020…??? • 2014 farm bill was a 5-yr bill expected to last thru 2018 • Discussions have begun • Risk management continues to be the framework--crop insurance focus • Maintain omnibus concept or split off food programs? • Specialty crops and conservation as compromise issues? • The “Team” that will write/move the farm bill SENATE HOUSE Pat Roberts (R-KS) Michael Conaway (R-TX) Debbie Stabenow (D-MI) Collin Peterson (D-MN)

  13. Oklahoma “A rose by any other name would smell as sweet” -- William Shakespeare, Romeo and Juliet

  14. The Budget

  15. Total Appropriations Source: Oklahoma Policy Institute, “Oklahoma State Appropriations, FY 2007 to FY 2017,” http://okpolicy.org/resources/online-budget-guide/expenditures/state-government-expenditures/appropriations-history/, Accessed 2/1/17 @ 3 pm

  16. Miller, Ken. 2017. “Oklahoma Economic Report: News and Analysis of Oklahoma’s Economy.” Accessed online https://www.ok.gov/treasurer/documents/OER_1-31-17.pdf on February 2, 2017 @ 1:30pm

  17. Miller, Ken. 2017. “Oklahoma Economic Report: News and Analysis of Oklahoma’s Economy.” Accessed online https://www.ok.gov/treasurer/documents/OER_1-31-17.pdf on February 2, 2017 @ 1:30pm

  18. http://www.infrastructurereportcard.org/oklahoma/oklahoma-overview/http://www.infrastructurereportcard.org/oklahoma/oklahoma-overview/ Source: American Society of Civil Engineers, “2013 Report Card for America’s Infrastrucutre: Oklahoma.” http://www.infrastructurereportcard.org/oklahoma/oklahoma-overview/, Accessed 2/3/17 @ 11:29 am

  19. Economics of budget decline

  20. Source: Wilkerson, 2017

  21. Unemployment Rates, December 2016 Source: Wilkerson, 2017

  22. Unemployment Rates, November 2016 Source: Wilkerson, 2017

  23. Source: Wilkerson, 2017

  24. Payroll Employment by Industry Source: Wilkerson, 2017

  25. Selected Housing Indicators *Percent change year-over-year. Source: Wilkerson, 2017

  26. Exports Source: Wilkerson, 2017

  27. Manufacturing Activity Source: Federal Reserve Bank of Kansas City, 2017

  28. What might the future hold?

  29. Source: Wilkerson, 2017

  30. Oil (WTI-Cushing) Prices Source: Energy Information Agency, “Daily Prices.” Accessed online http://www.eia.gov on 2/3/17 @ 11:45 am $53.55/barrel 2/2/17

  31. Natural Gas (Henry Hub) Prices Source: Energy Information Agency, “Daily Prices.” Accessed online http://www.eia.gov on 2/3/17 @ 11:45 am $3.12/MMBtu 2/1/17

  32. Source: Wilkerson, 2017

  33. Source: Energy Information Agency, “West Texas Intermediate (WTI) Crude Oil Price Probabilities.” Accessed on http://www.eia.gov/forecasts/steo/images/Probability_WTI.png 2/1/17 @ 10:15 pm.

  34. Source: Energy Information Agency, “Henry Hub Natural Gas Price Probabilities.” Accessed on http://www.eia.gov/forecasts/steo/images/Probability_HH.png2/1/17 @ 10:15 pm

  35. Sources • Wilkerson, Chad. 2017. “The Oklahoma Economic Databook: A summary of regional economic indicators for the state of Oklahoma.” Accessed online https://www.kansascityfed.org/~/media/files/publicat/research/indicatorsdata/regionaldatabook/2017/2017-01-24-okrdb.pdf on 1/30/17 @ 11:24 am • Federal Reserve Bank of Kansas City. 2017. “Tenth District Manufacturing Activity Continued to Expand Moderately.” Accessed online https://www.kansascityfed.org/~/media/files/publicat/research/indicatorsdata/mfg/2017/2017jan26mfg.pdf?la=en on 1/30/17 @ 11:15 am

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