There seems to be an increase in news stories these days attempting to alert us to an economic slowdown.
It's important to keep all of this in perspective. The United States, after all, has been on one of the great economic runs in American history. Unemployment is at a historic low. So, in other words, the sky is not falling.
The stock market has been struggling as of late, which is long overdue. Perhaps more concerning are the recent trends in the national housing market. The Wall Street Journal and Yahoo Finance both offered thorough reports detailing the housing market slowdown. Yahoo wrote that Goldman Sachs is alerting customers to the fact that the market has "shifted into a lower gear." Goldman Sachs blames an increase in mortgage rates, housing prices growing faster than rent and incomes, and tax law changes reducing the tax benefits of owner occupied housing.
The Wall Street Journal offered a comprehensive story that examined the slow down in a major metro area like Dallas. Again, perspective is key -- every real estate market is intensely local. What's happening in boomtown Dallas just isn't the same as what the market is doing in Eastern Kentucky.
But of the recent stories the one that concerns us the most is the rise in farm bankruptcies. The Hill reports on a rise in farm bankruptcies in the Upper Midwest states of Wisconsin, Minnesota, Montana and North and South Dakota. The story indicates farm bankruptcies have more than doubled in the region when compared to numbers from just three years ago. We have to say we are not surprised by this grim fact. We've written about this before and we write about this again -- that the ability of American farmers to compete without borrowing to the hilt to get ultra large is a very concerning development. The small farmer is increasingly squeezed out of the market. Financial ruin is certainly not a rarity for those trying to make a go of it off the land. Meanwhile, it appears there is little dispute that the agricultural community has been hurt by the President's trade war. The Economist reports September pork exports to Mexico and China have fallen by 31 and 36 percent, and soy bean exports to China have dropped 98 percent since January.
The Farm Bureau's President, Zippy Duvall, published an opinion piece in November titled "Time to Unify in Support of American Agriculture." The piece urges America and its policy makers to avoid the politically partisan quagmire that is found in our public sphere these days and instead adopt policies that serve the interests of farmers. The piece recommends stripping back government regulations, coming up with solutions to address the shortage in labor, opening up more markets for exports, and working to improve infrastructure. We agree. Meanwhile, the House and Senate haven't even been able to pass a new Farm Bill. Not good.
We also believe that when it comes to farm bankruptcies, the ability of international mega corporations to control the markets for ag products plays a very significant role. It may be time to rethink everything we are doing with agriculture, and looking at ways to increase going all local with our farm products and markets whenever possible. Obviously, with all the small farmers finding it incredibly difficult to compete, one can argue that the current system is not working.
This issue matters to anyone who eats, i.e. all of us. It also is of critical importance to rural America, and the time for taking action on the nation’s agriculture policies is upon us.