ILSOYADVISOR POST

WEBINAR: What is Happening? Positive and Normative Analysis of 2019

The 2019 news reels have been a rollercoaster for anyone watching but especially for agriculture. That, coupled with a unique growing season that was stressful in so many ways, has left many looking for true direction and the need to evaluate and recraft their plans. Presenter, Philip Krupps will conduct a macro review and take many of the current issues at hand from interest rates, banking standards, and commodities while instituting his method for true and factual data findings that drive decisions, not just information. 

Presenter: Philip Krupps, President of Wealth Management & Market President, United Community Bank

First Phase of Trade Deal
  • What does it all mean?
  • 1983 was a long time ago but a world apart in terms of agriculture
  • The U.S. economy is the best of the worst
    • Negative interest rates in European market
    • We have a strong dollar and economy
      • Export potential is weaker
  • More money is coming into the U.S.
The best days in the market happen in 7-12 days
  • Have to have precise aim on the dartboard
2020 outlook
  • Low employment rate
  • Low interest rates
    • Not pushed to have greater efficiency
    • U.S. will continue to be the best of the worst
  • Very aggressive lender market
How will we be defined in the soybean industry?
  • We can define ourselves by how we adapt our product
  • Don’t see a rally in grain markets this year
    • Even though we made an agreement in phase 1, that’s not action
  • Why is agriculture the bargaining chip?
    • It was time, there was so much intellectual and actual property that was being stolen it was time to make changes
    • We were going to run out of oil, but yet we are a net exporter
    • Liquid natural gas is limited though—and part of the Chinese survival model
    • We want to be the seller of ag products to those foreign markets
    • Never really worried about China eclipsing U.S.—because of their mandated 1 child policy the smaller generation won’t be able to support the baby boomer generation
    • We will continue to be in this very vanilla commodity market
  • Those who are taking a role in clearly identifying their products so people know a difference will lead them to a higher ground
    • Sustainability
    • High oleic
Future of the Farm Market
  • We have dodged a bullet for quite a few years
  • The great recession of 2008 produced section 179—tool for people to not pay taxes
  • We have built up a glut in the intermediary category
  • If we have poor planning—the equipment on the operation is what is going to get people in trouble, not land value
  • The volume of acres being sold is increasing
U.S. Economy Outlook
  • No real bubbles—don’t expect to see a recession in the U.S. economy coming
  • GDP is still tracking ahead of the bank to bank lending rate—will continue to have growth
  • Also depends on where the rest of the world is:
  • In 2018, Fed raised rates but the rest of the world wasn’t in a place for this to happen
  • Real key to agricultural commodity strength is strength across the marketplace
Globalization
  • You can have your own ideas but at the same time you really come down to one idealism
  • Nationalization is the response to the globalization nature of economies
Question & Answer

Illinois Soybean Association
The Illinois Soybean Association (ISA) is a statewide organization that strives to enable Illinois soybean producers to be the most knowledgeable and profitable soybean producers around the world. ISA represents more than 43,000 soybean farmers in Illinois through two primary roles; the state soybean checkoff and legislative and regulatory advocacy efforts.


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