News – AU – Outlook (finally) better looking for farmers

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Agriculture is looking up, and farmers can’t tell that they have seen it for a long time

Late last week, during the U.S. Department of Agriculture’s (USDA) Outlook forum, the agency issued a strong corn and soybean growing forecast, the USDA predicts that farmers will see 92 million acres of corn and 90 million acres this spring Millions of acres will be growing soybeans The USDA also forecast 45 million acres of wheat

If exactly, it would mean an increase in corn by 1.2 million acres and soybeans by 69 million acres. It would be the largest corn acreage since 2016. Soybeans would be just slightly less than the record of 902 million acres set in 2017

The report also had good news for meat producers, with total red meat and poultry production soaring to a record £ 1,065 billion in 2020, despite unprecedented challenges from the global COVID-19 pandemic, while pig and broiler production rose for the year 2020; Beef production remained virtually unchanged, however, with total red meat and poultry production projected to increase by about 1% to 1076 billion pounds in 2021, driven mainly by record beef, pork and broiler meat production

In 2020, livestock and broiler prices were lower due to lower demand for packers in the second quarter of the year.Nevertheless, prices rebounded in the second half but were below 2019 average prices for the year In the coming year, the growth in demand is expected to lead to higher prices for livestock and poultry despite expected increases in production

The Outlook Forum Has Only Improved The Optimistic Future Of The Farming Community Two weeks earlier, the Federal Reserve Banks of Chicago, Kansas City, and Minneapolis released updates on farm income, farmland values, and farm loan terms, and saw some sunny spots on Horizon

Agricultural lenders find the agribusiness in its best shape in years, according to their latest reports.Since 2014, the agribusiness sector has been in a seven-year dumpster-level commodity price crisis, with restaurant and school closings in 2020 not improving the situation as some Farmers are more likely to plow their crops than to reap

Thanks to a rally in the grain markets, more farmers will finally have an excuse to break out their black pens and put away the red ones. Corn, soybean and wheat prices are down thanks to dry weather, strong export demand from China, as well as domestic processing industries, that makes animal feed and biofuels has risen to its highest level in over six years

Chinese purchases are 180 from two years ago when the country almost stopped buying from American stocks during the trade war.At that time, soybean stocks were at a record 909 million bushels, according to the latest USDA forecast these shipments shrink to 140 million bushels

“Soybean exports are forecast to be $ 1 billion higher, to a record $ 274 billion, due to strong demand from China and higher prices,” said the USDA, the largest importer of soybeans in the country, importing 60% of the country The country’s soybean exports In the final three months of 2020, China bought a record $ 14 USDU worth S4 billion ag products If the USDA’s forecasts are correct, China would again be U’s number one customerS. ag exports

Income rose last year in large part due to federal support from the Trump administration thanks to the grant, which accounted for 40% of farmers’ income in 2020 and increased direct payments 107% year over year, could more Growers keep their farm afloat The Federal Supreme Court bankruptcy data shows that Chapter 12 bankruptcies of family farms and family fisheries totaled 552 filings in 2020, down 43 filings, or 7%, from 2019, but this number was the last Decade still the third highest

“Government payments have had widespread support throughout the year and, along with recent price hikes, the near-term outlook for the agricultural sector has improved dramatically,” the Kansas City Fed said in its Ag loan survey released two weeks ago “It was a U-turn” after nearly eight years of deterioration “


Overall, the nation’s net agricultural income is expected to grow 43% to $ 119 billion by 2019, according to data from USDA Farmers will have the highest net agricultural income since 2013, a broad measure of profitability

In the Ag Credit Survey, authors Nathan Kauffman and Ty Kreitman reported, “Overall, agricultural conditions in the Kansas City Fed region were ready to stay strong for the first time since 2013 in the first quarter of 2021, a majority of respondents indicated that for the first time since 2012, farm borrower incomes were higher than a year ago ”


Similarly, the Minneapolis Fed said its concurrently released poll found that 60% of bankers “predict further growth in farm income and spending” in the first quarter of 2021

The new outlook is a reversal from previous years when immense supply drove prices and farm income to the ground.Now the opposite is true: some farmers even sign contracts to sell their crops before they even get it However, some hold out and expect higher prices over the course of the year

However, increasing income also raises new questions for the Biden administration: Should the payouts continue as sales increase? While government subsidies are essentially a tradition in the agricultural sector, last year’s record disbursements ask whether enough is enough

“These farm subsidies need to be cut,” Anne Schechinger, Senior Economic Analyst at the Environmental Working Group, told Politico. “So many Americans are still grappling with the pandemic-triggered economic crisis, but farmers are doing really well ”

Most likely, further discussion on the matter will await Senate endorsement of Tom Vilsack for the lead role of the USDA. So far, Vilsack has not shown which direction he could go in, with this vote expected later this week

In its report, the AgLetter, the Chicago Fed said farmland prices in the Midwest rose 6% year-over-year in early 2021 and were “the biggest such gain since 2012,” the report said continued: “Taking inflation into account, the values ​​for arable land in the district increased by almost 5% annually in 2020 This real increase was the first since 2013 ”

“For the first time since Q1 2011, a majority of responding bankers (58%) forecast farmland values ​​to rise in the next quarter, in this case the first quarter of 2021,” the Chicago Fed said. In particular, none of the respondents predicted a decline in arable land values ​​”

On his blog, Agricultural Economic Insights, Brent Gloy writes: “(t) The two main factors influencing farmland prices – income and interest rates – are both moving positively. Agriculture in 2021 started at a high level, and so does the Farmland market faces a surge ”

After nearly a decade of felling, it now seems possible that farmers can finally get through a year with fewer bruises

I am a freelance writer who has worked in agriculture my entire life. Graduating from the University of Kentucky College of Agriculture, I spilled my stake in

I am a freelance writer who has worked in agriculture my entire life.A graduate of the University of Kentucky College of Agriculture, I got my share of the sweat in the fields and working with cattle, mostly cattle and horses, Buried I grew up in southern Kentucky and now live in Lexington. I am a regular contributor to Farm World News and ZMEScience. My agriculture letter has also appeared in Acres USEIN and Army Magazine My hobbies are writing, reading and having coffee. You can find me on Twitter @ jordans1981

United States Department of Agriculture, Soybeans, USDA Rural Development, Cereals

News – AU – Outlook (finally) better looking for farmers

Source: https://www.forbes.com/sites/jordanstrickler/2021/02/22/outlook-finally-looking-brighter-for-farmers/