DENVER — CoBank’s Knowledge Exchange Division released its Quarterly Rural Economic Review on Oct. 12. The report stated that the US and global economy will support increased demand in domestic and export markets through the rest of 2018.

However, CoBank said that the US’ competitiveness is currently constrained by trade uncertainties and the elevated value of the dollar. The bank also said “this places further pressure on the agricultural part of the economy as output in most industries continues to rise.”

“Agricultural markets are being squeezed as prices remain weak,” said Dan Kowalski, vice president of CoBank’s Knowledge Exchange Division. “While recently negotiated trade deals show some upside for agriculture, global demand for output from the US agriculture sector is being outpaced by current US production.”

The report went onto say that “the animal protein and dairy sectors continue to benefit from strong domestic demand and the promise of better access to Mexico and Canada, but will need more export market growth to absorb their current pace of output and expansion.”

The animal protein sector also benefited from low commodity prices and excess supply during the year, but trade concerns continue to weigh on beef, poultry and pork markets, according to CoBank. However, domestic consumer demand remains stout for animal protein, although pork is experiencing the largest increase caused by trade disputes and oversupply.

CoBank’s report said the escalating trade war with China is the leading risk for US agriculture and retaliatory actions taken by China and other trading partners have raised concerns of long-lasting effects on agricultural supply chains. The report did acknowledge the US Dept. of Agriculture’s July assistance package to farmers and ranchers suffering from the trade war could have a modest impact on farm financial status.

CoBank is a $131 billion cooperative bank serving agribusinesses and providers of rural power, water and communications across the United States.