McLEAN, Va. — At its monthly meeting on December 13, the Farm Credit Administration board received a quarterly report on economic issues affecting agriculture, together with an update on the financial condition and performance of the Farm Credit System (System) as of Sept. 30, 2019.

It's been a difficult year for U.S. farmers and ranchers. Trade disruptions, weather extremes and low farm prices have presented significant economic challenges for agricultural producers. Crop insurance indemnities, farm programs and Market Facilitation Program payments continue to provide important financial support to the farm economy. The level of support under these programs varies by region and commodity. 

Although the trade situation remains unsettled, there have been some positive developments recently. U.S pork exports to China are increasing because of the overseas outbreak of African swine fever. And China continues to purchase soybeans periodically although the level of future transactions remains uncertain.

With large global supplies, crop prices are expected to remain low in 2020. This will limit attractive price opportunities for U.S. farmers. Livestock and dairy returns are likely to be positive in early 2020, but trade risks remain elevated.

For the first 9 months of 2019, the System reported steady earnings and higher capital. Portfolio credit risk is higher for the year, but levels remain acceptable. Although credit stress in the System's portfolio is up, System institutions are financially sound and well capitalized. They continue to have the risk-bearing capacity to respond to the credit needs of U.S. agriculture.