USDA Chief Economist Robert Johansson provided an outlook for U.S. agriculture today at the at the Department’s annual Agricultural Outlook Forum in northern Virginia.

In part, Dr. Johansson indicated that, “U.S. economic growth is expected to be near 3 percent in 2016 and 2017 before gradually moving to a longer term growth rate of 2.3 percent…[and]…the real value of the dollar increased substantially in 2015 relative to competitor and customer currencies and that growth is expected to continue through 2017.”

“Does that mean a stronger U.S. economy and strong U.S. dollar adversely impacts the U.S. agricultural economy? Clearly, a stronger dollar means it is more difficult to sell products to countries with weaker currencies, such as Egypt and Nigeria (major wheat importers) and it is easier for countries, such as Canada and those in the EU, to sell their agricultural products abroad, making for an extremely competitive trade environment. However, a strong economy also helps U.S. producers in several ways. First, it is easier for U.S. buyers to import goods, such as fertilizer, from countries with weakening currencies, such as Canada, Russia, and Ukraine.

“Second, a stronger U.S. economy provides improved off-farm income opportunities for a large majority of U.S. farm households. Since the latest recession ended in 2009, median farm household income has grown faster than U.S. median household income (see figure 9). Between 2010 and 2016, median farm household incomes are forecast to have increased by more than 50 percent. Most of that growth has come from improved off- farm income opportunities. Off-farm income and on-farm income for median farm households are all projected up in 2016. That is true for both smaller residential farm households as well as larger commercial farm households.”

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DTN writer Todd Neeley reported yesterday that, “The U.S. Circuit Court of Appeals for the Sixth District in Cincinnati ruled it has jurisdiction to hear numerous legal challenges to the waters of the United States rule on Monday.

“In the court’s majority opinion, Judge David W. McKeague wrote that because federal district courts issued conflicting rulings on a number of cases last year, the Sixth Circuit should hear many of the challenges levied by states and a variety of industry groups, including those in agriculture.

“The Sixth Circuit issued a national injunction of the rule last year, putting it on hold until legal issues could be resolved. Many legal experts believe the rule ultimately will be decided by the U.S. Supreme Court. In a ruling last year, the Sixth Circuit Court was highly critical of the U.S. Environmental Protection Agency and the U.S. Army Corps of Engineers in the development and finalization of the rule.”

Mr. Neeley indicated that, “In the ruling announced Monday, Judge McKeague said it would make legal sense for the Sixth Circuit to consider the case.

“‘The Clean Water Rule is intended to clarify the scope of ‘the waters of the United States’ subject to protection under the Clean Water Act,’ according to the court’s ruling. ‘The act provides that certain specified actions of the EPA administrator are reviewable directly in the U.S. Circuit Courts of Appeals.'”

The DTN article added that, “Some 30 states have sued the EPA and the Army Corps of Engineers to stop the rule’s enforcement. In a ruling last year the Sixth Circuit Court said it believes the plaintiffs have demonstrated their legal claims could be successful.

“Exactly how long the stay will last is not known.”

The Waters of the U.S. Rule has been identified as an important issue that could impact agriculture as the executive branch and the Senate consider a new U.S. Supreme Court Justice in the future.

Tom Meersman reported yesterday at the Minneapolis Star Tribune Online that, “Farmland prices in Minnesota continue to soften as prices for corn and soybeans remain relatively low and the outlook for 2016 appears to offer marginal profits for many crop growers.

“The changes are part of a pattern of falling values for farmland in much of the central U.S., according to several reports published within the past week.

“An analysis by the University of Minnesota Department of Applied Economics found that the average median price of farm real estate in Minnesota dropped 5.5 percent during the first nine months of 2015, from $4,878 to $4,611 per acre. The median is the price at which half of the transactions are higher and half are lower, and is considered a good measure to gauge price trends at the state or regional level.”

Mr. Meersman explained that, “Cash payments for Minnesota corn generally have stuck between $3.25 and $3.60 per bushel in recent months, below the cost of production for many farmers.”

AP writer Mary Clare Jalonick reported yesterday that, “A Senate committee is moving forward on legislation that would prevent states from requiring labels on genetically modified foods.

“Vermont is set to require such labels this summer. Senate Agriculture Chairman Pat Roberts of Kansas released draft legislation late Friday that would block that law and create new voluntary labels for companies that want to use them on food packages that contain genetically modified ingredients. The Senate panel is scheduled to vote on the bill Thursday.”

The AP article explained that, “The bill is similar to legislation the House passed last year. The food industry has argued that GMOs, or genetically modified organisms, are safe and a patchwork of state laws isn’t practical. Labeling advocates have been fighting state-by-state to enact the labeling, with the eventual goal of a national standard.

“Senators have said they want to find a compromise on the labeling issue before Vermont’s law kicks in.”

Jacob Bunge reported yesterday at The Wall Street Journal Online that, “The U.S. Environmental Protection Agency said it would require seed companies to enhance defenses against bugs resistant to anti-pest genes in biotech corn, but it stopped short of adopting stricter proposals to escalate the fight against crop pests.

“The EPA’s plan, outlined on Thursday, requires Monsanto Co. and other companies producing genetically modified seeds to investigate corn fields suspected of harboring corn rootworms that have developed resistance to GMO corn—and to implement a response.

“But the agency’s plan doesn’t include requirements to switch some bug-afflicted fields to different crops, which was part of an earlier EPA proposal that drew complaints from farm groups and seed companies.”

Mr. Bunge pointed out that, “Under the EPA’s plan unveiled Thursday, seed companies would be required to investigate reports of suspected resistance, replacing a previous strategy that randomly sampled rootworm populations around the Corn Belt. If a company confirms there are resistant rootworms in a field, it will have to implement a response for a half-mile area around the site, the EPA said.

“Options for such response plans include switching fields over to other crops like soybeans, planting non-GMO corn and using soil-based insecticide, or planting GMO corn that produces multiple pest-killing proteins. ‘The framework allows for a variety of options to be utilized, provided they are the most effective to address the situation,’ an EPA spokesman said.”