U.S. – Indo-Pacific: The U.S. and Taiwan are set to hold discussions this week for negotiations surrounding the Taiwan Initiative on 21st Century Trade. Key issues include opportunities for farmers and SMEs on issues such as labor, the environment, state-owned enterprises, and non-market policies.
IPEF: Australia will host the next negotiating round for the Indo-Pacific Economic Framework this December according to a readout from Australia and New Zealand’s trade ministers. The meetings will be held at the senior official and not ministerial level.
Food Security: Russia rejoined the Black Sea Grain initiative on Nov. 2, after receiving assurances that Ukraine would not use regional shipments for strategic plays in the war. The decision follows international pressure to revive the deal in the face of a global food shortage.
Section 301: The Office of the U.S. Trade Representative (USTR) announced the list of questions for public comment regarding in the agency’s four-year statutory review of the Section 301 investigation on China. The online portal for submissions will open November 15, 2022 and close on January 17, 2023.
Supply Chains: A group of over 300 local, state, and national trade associations submitted a letter to the Biden Administration last week to address the potential rail strike that could result from a failure to strike a union deal before the Nov. 19 deadline.
U.S. – EU: Tensions are rising between the EU and the U.S. with regard to the Inflation Reduction Act (IRA). EU officials, on Nov. 4, submitted comments to the U.S. Department of Treasury, outlining the “discriminatory domestic content requirements, in breach of WTO rules” present in five of the tax credits proposed under the IRA, including that for the EV industry.
U.S. – Ecuador: Last week, U.S. Trade Representative Katherine Tai met with Ecuadorian Minister of Production, Foreign Trade, Investments, and Fisheries Julio José Prado to discuss the 2021 Protocol on Trade Rules and Transparency. The meeting established a Fair-Trade Working Group and focused on the need for future talks on labor, the environment, and trade.
WTO: While the Office of the U.S. Trade Representative does not expect a robust approach to WTO reform in the short term, Assistant U.S. Trade Representative for WTO and Multilateral Affairs Andrea Durkin said the Biden Administration believes in a proactive process for WTO reform that is conducted as “reform by doing.”
“It’s long overdue for Pres Biden & USTR to use USMCA to challenge Mexico on their threat of banning GMO corn + start believing what Mexico has been saying all along Pres Biden stop being weak This game of chicken will cost Iowa farmers big time.”
U.S. and Taiwanese officials are set to meet this week to discuss possibilities for a trade agreement and next steps for the U.S. – Taiwan Initiative on 21st Century Trade. Assistant U.S. Trade Representative Terry McCartin will lead the U.S. delegation to the in-person meeting alongside representatives from the National Economic Council, the Department of Commerce, the Department of Treasury, the Small Business Administration, and the Food and Drug Administration. The leaders will also discuss opportunities for farmers and SMEs on issues, such as labor, the environment, state-owned enterprises, and non-market policies.
Indo Pacific Economic Framework
Australia to host IPEF talks
Australia will host the first negotiating round for the Indo-Pacific Economic Framework (IPEF) in December according to a readout from Australia and New Zealand’s trade ministers. The meetings will be held at the senior official and not ministerial level.
Several industry groups and lawmakers continue to express concerns that the Administration’s exclusion of market access provisions in IPEF diminishes U.S. producers’ and exporters’ competitiveness in the region despite other ambitions in reducing non-tariff measures as outlined in the trade pillar, led by USTR.
APEC Forum to be held next week
The 2022 Asia-Pacific Economic Cooperation (APEC) Forum will be held in Thailand from Nov. 14-19 where leaders will discuss opportunities to expand trade and investment in the region through strengthened business operations and good governance. Participants are set to discuss themes surrounding economic integration, digitalization, and innovation with the WTO as a focal point of continued relations. Further, the forum will also seek to heighten connectivity through cross-border travel and tourism, support for the services sector, and increased investment in health security measures. The venues and dates are:
Honolulu, Hawaii – Informal Senior Officials’ Meeting (December 2022)
Palm Springs, California – First Senior Officials’ Meeting and Related Meetings (February 2023)
Detroit, Michigan – Second Senior Officials’ Meeting, Ministers Responsible for Trade Meeting, and Related Meetings (May 2023)
Seattle, Washington – Third Senior Officials’ Meeting, Women and the Economy Forum, and Related Meetings (August 2023)
TBA – APEC Economic Leaders’ Week (November 2023)
President Biden will not attend this year’s APEC forum, but Vice President Kamala Harris will lead the delegation to represent the U.S. in Thailand.
APEC members include Australia; Brunei Darussalam; Canada; Chile; People’s Republic of China; Hong Kong, China; Indonesia; Japan; the Republic of Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; the Philippines; the Russian Federation; Singapore; Chinese Taipei; Thailand; the United States of America; and Vietnam.
Tai meets with new Mexican Economy Minister
U.S. Trade Representative Katherine Tai met with newly appointed Mexican Secretary of Economy Raquel Buenrostro on Nov. 3 to congratulate her on her recent appointment to office. Ambassador Tai also used the meeting to emphasize the importance of the economic relationship between the U.S. and Mexico under the implementation of the USMCA.
Further, Tai underlined the U.S.’s desire to address outstanding areas of contention with Mexico’s energy policy and the proposed 2024 corn ban. In this, Ambassador Tai urged the minister to adhere to science- and risk-based regulatory approvals for agricultural biotechnology. Both officials agreed to maintain open communication on these issues.
Vilsack optimistic about U.S. corn exports despite Mexico ban
U.S. Secretary of Agriculture Tom Vilsack expressed optimism regarding the future of U.S. corn exports to Mexico despite the country’s 2024 ban on genetically modified corn. In his recent statements to Agri-Pulse, the secretary highlighted the contradictory declarations given by Mexican Secretary of Agriculture Victor Villalobos and Deputy Minister Victor Suarez. While Secretary Vilsack acknowledged the statements given by Deputy Minister Suarez regarding the implementation of the ban, he also emphasized the assurances provided by Secretary Villalobos regarding U.S. corn exports to Mexico.
In recent comments, Suarez clarified that the ban would affect feed corn, which would cut U.S. exports to the country in half following implementation. According to the U.S. Department of Agriculture, the U.S. exported 16.8 million MT of corn to Mexico in 2021. However, a recent study by World Perspectives cuts future projections to 2.7 million MT of non-GM corn exports should the ban be enacted.
Proponents of the provision are voicing concerns about Mexico’s ability to find substitutes for the decreased corn imports, highlighting the low availability of non-GM corn, most of which has already been contracted for export to other countries in the coming year. “The (non-GMO) seed we are conditioning today — that was just harvested in the U.S.” is “going to markets already,” said President and CEO Andy Lavigne of the American Seed Trade Association.
A transition from GM corn to non-GM products would not be immediate; such a move would require several years of planning and reorganization to complete. Lavigne furthered his comments, stating that the ban of biotechnology would hurt citizens immensely, especially “when we’re looking at the global challenges we have with food security, food prices and climate change.”
USTR posts questions for comment in Section 301 review
The Office of the U.S. Trade Representative (USTR) posted the anticipated list of questions for public comment regarding USTR’s ongoing four-year statutory review of the Section 301 investigation on China. The agency aims to gather stakeholder input on the following issues:
The effectiveness of the tariffs in obtaining the elimination or counteraction of China’s predatory IP practices
Other actions that could be taken to achieve the objectives, including measures against other products and services
The effects of the tariffs on:
The U.S. economy and consumers
Domestic manufacturing, including capital investments, domestic capacity and production levels, industry concentration, and profits
U.S. technology, including leadership and development
Whether the tariffs have resulted in higher additional duties on inputs used for additional manufacturing in the U.S. than the additional duties on particular downstream products or finished goods incorporating those inputs
Per the Federal Register notice issued on Nov. 1, USTR will open a comment period from Nov. 15, 2022 at 12:01 am ET until Jan. 17, 2023 at 11:59 pm ET.
Russia rejoins Black Sea Grain initiative
Russia, on Nov. 2, announced that it would rejoin the Black Sea Grain initiative to allow the safe passage of grain shipments from Ukraine. The decision follows international pressure to revive the deal in the face of a global food shortage. The threat of hunger upticks is particularly present in countries without the resources to subsidize basic food production. In a series of commentaries and official statements from global players, UN Secretary General António Guterres outlined his objective of “removing the remaining obstacles to the exports of Russian food and fertilizer” by reinstating the deal.
President Joe Biden also commented on the issue, stating, “It’s really outrageous to increase starvation” by using food as a weapon. U.S. Secretary of State Antony Blinken added that “In suspending this arrangement, Russia is again weaponizing food in the war it started, directly impacting low- and middle-income countries and global food prices and exacerbating already dire humanitarian crises and food insecurity.”
Grain exports from Ukraine continued following Russia’s suspension of the Black Sea Grain initiative on Oct. 29 due to continued efforts by the U.N., Turkey, and Ukraine to continue operations. Shortly after the initial suspension, Russia announced its intention to prevent ships from exporting grain from Ukraine. Further, the Russian Ministry of Defense cited security concerns as a key rationale for blocking the shipments, threatening to deploy the navy for ship inspections of exports leaving Ukraine.
However, Russia announced last week that it has been assured by the Ukrainian government that it would not use the grain initiative for tactical military action against the nation. President Vladmir Putin commented on Russia’s concerns over the country’s inability to export large sums of its own agricultural goods and the need for previous agreements to be upheld. Resumed participation in the agreement has also been complemented by Russia’s resumed engagement in negotiations for the deal’s renewal in mid-November.
U.N. Under Secretary General for Humanitarian Affairs Martin Griffiths also iterated progress in the area of fertilizers in the area of food security, stating “It’s hugely important that Russian fertilizer gets to the world so that we don’t find ourselves looking down the barrel of hunger after the next harvests.”
Fertilizer production upticks with low fuel prices
Given recent slashes in natural gas prices, key producers have announced capacity increases for fertilizer production following decreased output for most of the second half of 2022. Current production is operating at roughly 63% capacity for average producers, up from 37% in October, according to CRU International Ltd.
Despite recent gains, fuel prices are hovering well above prewar levels. Further, several producers have elected to maintain larger capacity cushions given lower demand in Europe which is experiencing historic inflation amid a looming recession. Producers are also expecting increases in fuel prices with winter fast approaching. According to General Manager of LC paper 1881 SA Pau Vila, production ramp ups will likely vary for plants “if they had temporary staff-reduction programs in place” due to the need to “recover all the employees and raw material immediately to restart operations.”
Grain prices increase among other commodity price declines
Lowered production forecasts in the U.S. and Europe resulted in a 4.3% increase in corn prices in October, alongside increases of 3% and 3.2% in cereal grains and grain, respectively. At the same time, prices for other commodities decreased last month, according to the UN Food and Agriculture Organization (FAO)’s Food Price Index.
Given the current state of the Black Sea initiative, former House Agriculture Chair Collin Peterson highlighted the volatility of the global grain markets, stating that the options available to stabilize the market are limited for U.S. producers. Further, Kip Tom with Tom Farms noted the backlog of grain awaiting export from Ukraine. The ability of Ukraine to harvest its crops this fall hinders on the country’s ability to free storage by exporting its existing reserves. As such, uncertainty with the grain initiative is causing “price volatility every time [Vladmir] Putin decides he is in or he is out,” he revealed.
Global food prices remain flat
The Food and Agriculture Organization’s (FAO) Food Price Index averaged 135.9 points in October 2022, virtually unchanged from September, with the price indices of all the covered commodity groups, except cereals, down month-on-month. A rising Cereal Price Index countered drops in the indices for vegetable oils, dairy, meat and sugar. With the latest updates, the FFPI has dropped 23.8 points (14.9 percent) from its peak in March this year but remained 2.7 points (2.0 percent) above its value in the corresponding month last year, according to the FAO. Other highlights from the report include:
The Vegetable Oil Price Index “averaged 150.1 points in October, down 2.4 points (1.6 percent) month-on-month and standing nearly 20 percent below its year-earlier level. The continued decrease of the index was driven by world lower prices of palm, soy and rapeseed oils, which more than offset higher sunflower seed oil quotations.”
The Cereal Price Index “averaged 152.3 points in October, up 4.4 points (3.0 percent) from September and 15.2 points (11.1 percent) above its value a year ago. International reference prices of all the major cereals were up month-on-month.”
The Meat Price Index “averaged 118.4 points in October, down 1.6 points (1.4 percent) from September, marking the fourth consecutive monthly decline, with world prices of all meat types registering drops. However, the index remained 6.4 points (5.8 percent) above its value a year ago.”
The Dairy Price Index “averaged 140.1 points in October, down 2.5 points (1.7 percent) from September, marking the fourth consecutive monthly decline, nevertheless, it remained 18.7 points (15.4 percent) above its value a year ago.”
U.S. overall trade deficit widens in September
The U.S. deficit for goods and services jumped sharply (11.6%) in September as imports increased and the pace of exports declined. The deficit expanded to $73.3 billion in September, up $7.6 billion from $65.7 billion in August (revised), reversing several months of decline, according to the U.S. Census Bureau. Additional details released by the Census Bureau:
September exports were $258.0 billion, $2.8 billion less than August exports. September imports were $331.3 billion, $4.8 billion more than August imports. The September increase in the goods and services deficit reflected an increase in the goods deficit of $6.6 billion to $92.7 billion and a decrease in the services surplus of $1.0 billion to $19.5 billion.
Year-to-date, the goods and services deficit increased $125.6 billion, or 20.2 percent, from the same period in 2021. Exports increased $378.1 billion or 20.2 percent. Imports increased $503.6 billion or 20.2 percent.
The average goods and services deficit decreased $2.5 billion to $69.8 billion for the three months ending in September. Average exports decreased $0.3 billion to $259.5 billion in September. Average imports decreased $2.8 billion to $329.3 billion in September.
Chinese exports contracted in October
Exports from China saw a slight decrease in October amid lowered trade in world markets. With rising inflation coupled with concerns regarding both energy and food exports out of Ukraine and Russia, external demand for Chinese goods experienced a sharp drop last month. Further, the barriers imposed by the Chinese government to contain the outbreak of COVID-19 in the country are exacerbating the situation. Chief Economist at Pantheon Macroeconomics in London Duncan Wrigley held that the decline in exports from China “is a worrying sign for global growth.”
In October, Chinese exports contracted by 0.3% compared to levels one year ago, with a 13% decrease of shipments to the U.S. and a 9% drop to the EU. Similarly, the South Korean Trade Ministry revealed that the country’s exports fell 5.7% last month with lower demand in memory chips, petrochemicals, and computers. With widespread cancellations for global shipments, costs for shipping containers have dropped significantly in the past few weeks; prices for shipments between Asia and the U.S. West Coast were reportedly down by 87% from last year, according to the Wall Street Journal.
Macquarie Group representative Larry Hu attributed the export decline to an economy which “slowed again in October due to the tightened Covid controls as well as the slowing external demand.”
West Coast port to expand soybean meal exports
The West Coast port of Grays Harbor is scheduled to receive $25.5 million to fund an expansion that would allow increased exports of soybean meal from the U.S. According to U.S. Secretary of Transportation Pete Buttigieg, the program works to “improve our port infrastructure, strengthen our supply chains, and help cut costs for American families.” As such, expanded facilities will effectively double the export capacity of AG Processing Inc.
The grants will allocate funding to the construction of an additional 50,000 feet of rail constructions, facilities for added storage, and other key elements to transportation infrastructure. In addition to federal funding, the project will also receive finances of $21.35 million in non-federal funds, $1.3 million of which will originate from soybean organizations, including the United Soybean Board, the Iowa Soybean Association, the Kansas Soybean Commission, the Nebraska Soybean Board, the North Dakota Soybean Council, the South Dakota Soybean Research and Promotion Council and the Soy Transportation Coalition.
Trade groups call for action on rail conflict
A group of over 300 local, state, and national trade associations submitted a letter to the Biden Administration last week to address the potential rail strike that could result from a failure to strike a union deal before the Nov. 19 deadline. Recall that last week, the Brotherhood of Railroad Signalmen (BRS) rejected the proposed agreement with 60% in opposition. Of the twelve unions, six have ratified the agreement, two have rejected, and four have yet to vote.
Union representatives voiced concerns over insufficient sick leave and an adequate cost of living adjustment in the contract proposal as railroad companies are reporting record profits. Under the compromised deal announced earlier by the White House, railroad workers’ pay would increase by 24% over five years, but the deal omitted changes to paid sick leave, a contentious issue in the negotiations.
OSRA proposal faces criticism
Representatives Dusty Johnson (R-SD) and John Garamendi (D-CA) proposed the Ocean Shipping Reform Act (OSRA) earlier this year with the intention of preventing carriers from refusing agricultural cargos at U.S. ports. However, onlookers are voicing criticism towards the Federal Maritime Commission (FMC)’s definition of reasonable justification for farm commodity refusals by carriers. Specifically, groups of farm and transportation organizations are complaining that the FMC’s current interpretations are too loose which allows for the relatively easy rejection of commodities for U.S. shipments.
Key among the provisions for dispute is the FMC’s allowance for carrier rejections given profit concerns. The Agriculture Transportation Coalition has stated that the provision prioritizes carriers’ profits over the growth of U.S. exporters “by including carriers’ pursuit of ‘profitability’ … as a reasonable basis upon which to refrain from accepting and carrying export cargo, the (proposed rule) provides carriers a loophole large enough to sail a … ship through — with room to spare.” Agriculture groups and other stakeholders have expressed concerns regarding the overapplication of FMC rulings and the possible favor extended to ocean carriers.
The original provision of the law held that ocean carriers could not “unreasonably decline export cargo bookings if such cargo can be loaded safely and timely, as determined by the Commandant of the Coast Guard, and carried on a vessel scheduled for the immediate destination of such cargo.” However, OSRA sponsor Johnson revealed, in an interview with Agri-Pulse, his concerns regarding the overreliance on “business decisions.” He also added that “Sending containers back to Asia empty may at times be the better business decision, but it’s the wrong decision for American exporters.”
U.S. – EU
Tensions escalate surrounding EV tax credit
EU officials, on Nov. 4, submitted comments to the U.S. Department of Treasury, outlining the “discriminatory domestic content requirements, in breach of WTO rules” characteristic of five tax credits proposed under the Inflation Reduction Act, including that for the EV industry. In its submission, members of the bloc requested waivers to several of the IRA measures in an effort to boost U.S.-EU cooperation on climate change.
“If implemented in its current form, the Act risks causing not only economic damage to both the U.S. and its closest trading partners, resulting in inefficiencies and market distortions, but could also trigger a harmful global subsidy race to the bottom on key technologies and inputs for the green transition,” said the European Commission, citing the potential for “retaliatory measures.”
During a meeting on Oct. 30 with European Commission Executive Vice President Valdis Dombrovskis, U.S. Trade Representative Katherine Tai discussed opportunities for joint work to address carbon emissions and overcapacity in steel and aluminum industries. The pair also outlined goals for the third U.S. – EU Trade and Technology Council (TTC) Ministerial on Dec. 5. Further, Dombrovskis raised the importance of the U.S. – EU Task Force to highlight and resolve concerns with the U.S. Inflation Reduction Act, namely the provision of the EV tax credit for collaboration on clean energy technology.
Ambassador Tai also met with a group of EU ministers in Prague last week to discuss the ongoing conflicts around the tax credit. During the meeting, EU representatives revealed that “It’s not only one or two member states, which are concerned … It’s also the small ones; they will have no access at all.” Czech Trade Minister Jozef Síkela revealed that European carmakers would like to receive the same benefit as North American manufacturers under the policy, holding that the current state of the bill “is extremely protective against exports from Europe.”
Dombrovskis outlined the next steps for the EU, prioritizing the task force established between the countries to address concerns. At present, the EU is “focusing on a negotiated solution before considering what other options there may be,” he revealed.
The task force met on Nov. 4, led by the U.S. National Security Council and the cabinet of the European Commission President Ursula von der Leyen. Further, South Korea—a large opponent of the EV tax provision under the Inflation Reduction Act. However, the issue is expected to comprise a large portion of the agenda during the third Trade and Technology Council (TTC) in December.
Germany requests renewed trade talks
German officials have requested trade talks with the U.S. following midterm elections in November. According to Deputy Government Spokesperson Christiane Hoffman, “there is a desire to have conversations [with the U.S. administration on a new trade deal] and move forward quickly.” Officials in the European Commission have expressed hope that renewed trade discussions would work to diffuse tensions surrounding the U.S. Inflation Reduction Act. The possibility of upcoming negotiations follows the significant breakdown of the Transatlantic Trade and Investment Partnership (TTIP) in 2016.
U.S. – Kenya
U.S. holds trade discussions with Kenya
USTR Katherine Tai held bilateral trade discussions with Moses Kuria, Kenya’s new Minister of Investments, Trade and Industry, according to a USTR readout of the meeting. The two officials, meeting virtually, exchanged views regarding the recent launch of the United States-Kenya Strategic Trade and Investment Partnership (STIP) and “opportunities to engage in the near future to pursue a strong working relationship that advances our common goals, including expanding bilateral trade with benefits.” Tai and Kuria expressed ambitions to hold in-person trade discussion in conjunction with the upcoming U.S.-Africa Leaders’ Summit.
The U.S. and Kenya announced the bilateral STIP on July 14, 2022 with the goal of “enhance cooperation” and “negotiating high-standard” trade commitments, particularly in areas of agriculture, anti-corruption, and digital trade.
U.S. – Ecuador
USTR trade talks with Ecuador
Last week, U.S. Trade representative Katherine Tai met with Ecuadorian Minister of Production, Foreign Trade, Investments, and Fisheries Julio José Prado to discuss the future of the U.S. – Ecuador relationship and the 2021 Protocol on Trade Rules and Transparency. The pair established a Fair-Trade Working Group and discussed the potential for future talks on labor, the environment, and trade. Further, the representatives discussed current barriers to agricultural trade and the Biden Administration’s Americas Partnership for Economic Prosperity (APEP) initiative.
In May of 2022, Ecuadorian President Guillermo Lasso urged the administration to consider the creation of a new trade deal with the country in addition to its existing agreements with Peru, Colombia, and Chile. Under the Trump Administration, the U.S. negotiated the Protocol on Trade Rules and Transparency with Ecuador, covering issues for trade facilitation, good regulatory practices, anti-corruption, and small and medium-sized businesses.
Burkina Faso excluded from trade benefit program
President Joe Biden announced in a letter to House Speaker Nancy Pelosi his intention to suspend trade benefits for West African country, Burkina Faso, due to political and military turmoil in the country. Specifically, the president held that conditions in Burkina Faso contradict the standards for the protection of the rule of law and political pluralism under the African Growth and Opportunity Act (AGOA). The country’s suspension from the benefits program will become effective on Jan. 1, 2023.
U.S. Trade Representative Katherine Tai also issued a statement in support of President Biden’s decision, stating that the administration “is deeply concerned by the unconstitutional changes in government in Burkina Faso.” At the same time, Amb. Tai reiterated the country’s ability to regain its membership in the program with the administration committing to “work with them” in their path “to meet the statutory criteria and return to elective democracy.”
Under the AGOA program, duties on over 1,800 products from Sub Saharan Africa are waived for countries that meet the outlined requirements included in the document.
USTR seeking more proactive WTO reform
Assistant U.S. Trade Representative for WTO and Multilateral Affairs Andrea Durkin said the Biden Administration believes in a proactive WTO reform approach and is not expecting a broad WTO reform package to move forward soon. Speaking at a trade symposium hosted by the Yeutter Institute at the University of Nebraska, Durkin said, “We’re not looking for a package for ministers to bless per se,” but rather, officials hope to see progress between WTO members through “reform by doing.” She noted the complexities and challenges with tackling broad-sweeping structural reforms but held that incremental discussions and progress are needed. For success, WTO members need to rethink long-held positions and engage with openness to new approaches and willingness to compromise.
Durkin acknowledged the vital importance of working dispute settlement system and that U.S. officials are engaging in pragmatic discussions with WTO members, including developing countries, regarding reforms needed to the present system.
WTO Opens Trade Remedy Online Database
The WTO last week launched a long-anticipated “Trade Remedies Data Portal.” The online portal catalogs trade remedy actions by WTO members and provides search tools on all antidumping and countervailing duty actions notified by WTO members. Data are presented in the form of searchable tables and customizable graphs, and users may filter information based on various parameters, according to the WTO. The database was Developed under the Open Trade Data Initiative, a WTO Secretariat program to improve data collection and dissemination.
Ag Economy Barometer
The Ag Economy Barometer retreats again in October
The October Ag Economy Barometer declined to an index reading of 102, declining 10 points from last month’s decrease, and the second month of decline. The October result remains well below the level from the previous year and retraces to lower levels observed in late 2015 and early 2016 when farm income was sharply lower.
In October, survey respondents’ biggest concern for going forward included higher input costs. Other concerns included rising interest rates that are dampening interest in investing in new farm equipment, input availability, and softening land values.