THE U.S. RURAL economy will continue to face headwinds in 2020 and is expected to underperform relative to the economy of urban America. Since 2014, gross domestic product growth in rural counties has averaged almost one percent less than in their urban counterparts. That trend is likely to continue without a significant upswing in agricultural commodity prices, energy exploration, rural manufacturing, and other industries upon which rural economic growth depends.
Despite that bearish prognosis, there is room for optimism, according to a comprehensive 2020 outlook report from CoBank's Knowledge Exchange division. The U.S. farm economy has demonstrated its resiliency in the face of trade wars, extreme weather, and other disruptive events. While the downside impact of trade disputes and tariffs has been severe for many, some agriculture sectors will see stronger exports and higher prices. Rising animal protein and dairy exports will be a bright spot for producers in 2020.
"Most current signals indicate the overall domestic economy is on firm footing, thanks almost exclusively to the consumer," says Dan Kowalski, vice president of CoBank's Knowledge Exchange division.
The report examines 10 key factors that will shape agriculture and market sectors that serve and impact rural communities throughout the U.S.
After a year of trade tensions, declining GDP, and the slowest global economic growth since the depths of the financial crisis, the world's leading economies hope to turn the page in 2020. A leveling off of trade tensions --which should occur once the U.S. and China have signed "phase one" of a trade deal in which China is supposed to agree to buy $200,000,000,000 worth of U.S. products--would allow global economic growth to bottom out in early 2020 before showing signs of life later in the year.
The U.S. economy enters the new year decisively split--powered by a resilient and confident consumer but hamstrung by a risk-averse business sector that has stopped investing. Now that stimulus effects from the 2017 tax reform and the 2018 spending bill have faded, the economic expansion will show its age, losing steam in the coming year. There is evidence that, since 2017, more people, including those in rural communities, have shared broadly the benefits of economic growth, despite the continual rise in wealth inequality.
All eyes will be on the central banks as the world inches closer to the end of the longest period of economic growth in...