US agribusiness faces pressure far beyond China trade

Subject

US agribusiness outlook.

Significance

The farm state of Iowa is being suggested as a symbolic location for President Donald Trump and his Chinese counterpart, Xi Jinping, to sign phase one of a trade pact this year. Around 15% of Iowa’s GDP comes from revenue from crops, animals and other agricultural products, and any trade deal that the Trump administration strikes with Beijing is likely to include substantial Chinese purchases of US farm produce.

Impacts

• Farming families on all but the largest farms will be under pressure to raise more non-farming income.
• To gain scale, farms will continue to specialise, either growing crops or raising livestock; fewer farms will produce both.
• Opportunities for leased services such as soil preparation and harvesting will rise as farmers seek to reduce capital equipment costs.
• More affordable and accessible robots will help small and medium-sized farms to close the productivity gap with farms with more technology.
• Agritourism will become a source of new revenue for many farms.