Your Pro Farmer newsletter is now available... Agricultural economists are growing even more pessimistic about the state of the ag economy. A majority of ag economists are concerned President Donald Trump’s tough trade and tariff stance could push agriculture deeper into a recession while also giving Brazil more of a competitive edge. Aside from trade, there is more focus on the U.S. growing season with corn plantings running ahead of average and soybean seedings on a record clip. Summer rallies in December corn futures, defined by us as occurring between May 1 and Aug. 10, are more the norm than the exception, providing opportunities to advance sales throughout the growing season. On the policy front, USDA secured deals with Mexico on New World screwworm and water supplies. EPA granted an emergency waiver for summertime sales of E15 across the country. We cover all of these items and much more in this week’s newsletter, which you can access here.
Labor market shows resilience as jobs growth slows less than feared... The U.S. economy added 177,000 non-farm payrolls in April, down from the downwardly revised gain of 185,000 in March. The unemployment rate held at 4.2%. Average hourly earnings rose 0.2% in April, resulting in a 3.8% annual increase, enough to support consumer spending and the economy for now.
Markets reduced chances for a mid-year interest rate cut, though they still reflect roughly 50% odds of the next move in June. Barclays and Goldman Sachs now expect the Federal Reserve to deliver the next interest rate cut in July.
North American UAN, urea market facing perfect storm... Some farmers are having a hard time finding UAN. Josh Linville, vice president of fertilizer with StoneX Group says, “This is the perfect storm we’ve been scared of for years and years and years.”
“For the last 30 days, nobody’s been able to find April tons in large quantity, aside from a few truckloads.” He says, “Now you can’t find tons for May ship. Retailers are having to jump on June shipped tons, and price them today, or run the risk that they won’t be there. An incredibly tight supply situation.”
He says an extended application season due to a dry fall, production dips from unexpected plant shutdowns, increased UAN exports and decreased imports have all combined to limit available supplies. “You’re not going to raise a corn crop without nitrogen. Well, now all of a sudden they’re having to switch to urea, which we’ve seen urea prices up almost $100 a ton in the last week and a half.”
Linville says some growers may turn to side-dressing anhydrous ammonia for their nitrogen needs. “Well, what’s it take to side dress anhydrous? Maybe this is the year we try something new.” He says, “Typically by this point in time, as you start to move into those smaller pocket areas of side-dress demand, prices will tend to go down before we move into the summer. We haven’t seen those prices fall like we normally would. So, while you can’t point to a higher price, the fact the price isn’t falling is something that takes notice.”
Linville encourages farmers to stay in close contact with their fertilizer retailers throughout the growing season. “Maybe they have the product in place, maybe they bought ahead and got prepared for you.” He says, “If not, you need to start looking at options.”
Trump’s FY 2026 ‘skinny’ budget proposals... President Donald Trump unveiled a “skinny” budget for fiscal year (FY) 2026, offering an initial, high-level outline of his administration’s spending priorities. It proposed about $163 billion in cuts to key federal education, health, housing and labor programs while still seeking to boost spending on defense. This preliminary document serves as a political and fiscal roadmap, with a more detailed budget request expected later in the month.
House panels are set to hear from several cabinet officials next week on the package coming from the administration that would call for $557 billion in non-defense spending, a cut of $163 billion from FY 2025 (representing a 22.6% cut from current levels), while national security funding would rise to $1.01 trillion, a 13% increase from $892.3 billion. The biggest thing the document will do is give lawmakers guidelines for writing their FY 2026 budget plans as they will not just rubber stamp the administration’s proposal but will put their own mark on the budget plan with an eye on completing their work before FY 2025 ends Sept. 30.
Trump is proposing a more than $4.5 billion cut to USDA, about a 17% reduction from its budget for fiscal year 2025. Programs facing the steepest cuts include farm conservation programs and rural development.
The budget requests a record $1.01 trillion for national security, marking a 13% increase from the previous year ($892.3 billion). This reflects the administration’s priority to bolster border security and military spending.
There is consideration of a $9.3 billion rescissions package, which would claw back funding already approved by Congress for agencies such as the State Department, USAID, NPR and PBS. If formally submitted, this would trigger a 45-day window for Congress to act, or the funds would be disbursed as required by law-though Trump has challenged the constitutionality of that requirement.
Bottom line: The skinny budget acts as a statement of the president’s priorities rather than a binding fiscal plan. Congress, even with narrow Republican control, will ultimately decide which proposals to adopt or reject after lengthy negotiations. The aggressive cuts, especially to domestic programs, set the stage for significant partisan battles on Capitol Hill, with the risk of a government shutdown if appropriations bills are not passed in time.
OPEC+ to meet on Saturday to set June output policy... Key OPEC+ nations are discussing making another production increase of roughly 400,000 barrels a day in June ahead of a video-conference to set policy on Saturday, delegates told Bloomberg. The group led by Saudi Arabia and Russia stunned oil traders with a 411,000 barrel-a-day hike that was triple the amount originally planned for May, in an apparent bid to discipline its over-producing members. They’re considering doing the same again next month, said the delegates.