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CoBank Quarterly: U.S. Economic Recovery Hinges on Virus Control and Consumer Confidence

DENVER, July 10, 2020 (GLOBE NEWSWIRE) -- Rural industries are grappling with how to adjust their businesses to remain relevant and sustainable in the face of the coronavirus pandemic. Agricultural supply chains have been massively disrupted and lost revenue. Water and power suppliers have adapted as commercial customers went dark and demand shifted to residential customers.According to a newA Quarterly reportA from CoBanka??sA Knowledge Exchange, the recent rebound in the U.S. economy is real, but the sharpest post-shutdown economic gains are almost certainly behind us and a long grind to shore up a shaky economy lies ahead.a??Economic data prior to the recent resurgence of coronavirus cases has shown a consistent, steady improvement in the U.S. economy, coinciding with business re-openings,a?? said Dan Kowalski, vice president of CoBanka??s Knowledge Exchange division. a??But traditional economic data can go stale remarkably fast in the COVID era, making high-frequency economic indicators an essential tool. And those indicators are signaling a plateau, followed by a possible downshift in the economy.a??Despite COVID-19, U.S. grain has been moving and basis has generally tightened since April 1. Wheat export activity has been strong and domestic demand has been healthy, as home-bound consumers buy more packaged food. China has been buying U.S. grain, although the run rate is below the levels agreed upon in phase one of the trade deal. Sorghum exports to China have been especially robust; sorghum basis has tightened meaningfully in response to strong export demand.Farm supply retailers benefited from a healthy spring agronomy season and are well-positioned for the remainder of the growing season. Crop progress has been above average amidst favorable weather. USDA rated around 70% of corn, soybean, and spring wheat crops as good-to-excellent in its June 29 report. A surprise ruling against dicamba could have long-term implications for crop protection sales and advice.
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