Farm economy finding its footing, experts say
By Mateusz Perkowski, Capital Press (OR)
Jan 12, 2021
Though the U.S. farm economy has proven resilient to the shock of the coronavirus outbreak, it remains on precarious footing while the pandemic rages, experts say.
Key crop and livestock sectors appear healthy in early 2021 and have room to improve as the year progresses, according to economists at the American Farm Bureau Federation’s virtual convention.
However, as the population endures “wave after wave” of COVID-19 infections, the coronavirus remains the “most pressing issue” facing agriculture and “mass vaccinations” are needed to get the industry on solid economic ground, said John Newton, AFBF’s chief economist.
“It won’t be until then that we start to turn the corner in the farm economy,” Newton said Jan. 12.
Farm profits were actually the second-highest on record last year, at $120 billion, but that’s largely due to “ad hoc support” from the federal government, Newton said.
About 39% of net farm income in 2020 came from government payments, which have also helped farmers withstand retaliatory tariffs in the trade dispute with China, he said.
Since 2018, trade and COVID-19 relief payments have amounted to $45 billion and the federal government is set to disburse another $13 billion to farmers in 2021, he said.
“The conversation moving forward is we’re not going to see that much ad hoc support flowing into the agricultural sector,” Newton said.
Trade plays a significant role in the strength of the U.S. agricultural economy and will be a major focus for the Farm Bureau as President-elect Joe Biden takes the reins, he said. “That’s the big unknown with this administration.”
The “phase 1” trade deal with China, announced by the Trump administration in early 2020, hasn’t fully lived up to expectations but has increased agricultural exports to that country, Newton said.
China should have...
... the Biden administration is expected to initially concentrate mostly on domestic concerns, there is a possibility it will re-examine entering the Trans-Pacific Partnership...
... Prices for cattle may rise by 5-9% during 2021...
... Global demand has also helped reduce supplies of commodity crops...