01/09/25 Afternoon CommStock Report – Hard to Avoid the Risk that You Can’t Predict

I do not see another sector of our economy which is more at risk to looming trade and immigration issues in 2025 than ours, the Ag sector. The Ag economy is weak and grain producers continue to work with negative margins. Interest rates are unlikely to decline further and farmers are borrowing more money to subsidize the gap between incomes and expenses. Current farm bill safety net reference prices were worthless as they were set to low for relevance producing no payments despite losses. There is no safety in ARC and PLC. If these generate payments then we truly will be dealing with a financial catastrophe. Crop Revenue Insurance will continue to be the most important component of risk management. That has always been the case but Livestock Revenue Protection Insurance is now becoming much more widely used by livestock producers. Strong livestock production returns improved the overall net farm revenue in 2024 causing USDA to improve their initial forecast. Cattle prices are at historical highs now leading into 2025 with their chin.   The lame duck Congress did extend the existing farm bill but it is stale and in serious need of revision. I would not hold high hopes…