Agricultural Economy

The USDA’s Economic Research Service (ERS) indicated on Friday that, “Net farm income, a broad measure of profits, is forecast to decrease $9.8 billion (8.1 percent) from 2020 to $111.4 billion in 2021.”

On Tuesday, the Senate Agriculture Committee held a confirmation hearing for Secretary of Agriculture nominee Tom Vilsack.

A recent report from the Federal Reserve Bank of Kansas City (“Ag Lending Update: Fewer New Loans to Farmers,” by Ty Kreitman and Cortney Cowley) stated that, “Lending activity at commercial banks continued to slow in the fourth quarter, according to the National Survey of Terms of Lending to Farmers. The volume of total non-real estate farm loans declined by about 1% from a year ago, but remained slightly above the 10-year average in the fourth quarter.” 

Jesse Newman reported on the front page of Saturday’s Wall Street Journal that, “A crop glut that battered American farmers is subsiding, fueling an unexpected recovery in the U.S. Farm Belt following a yearslong agricultural recession.”

On Wednesday, the Federal Reserve Board released its January 2021 Beige Book update, a summary of commentary on current economic conditions by Federal Reserve District. The report included several observations pertaining to the U.S. agricultural economy.

Reuters News reported last week that, “World food prices rose for a seventh consecutive month in December, with all the major categories, barring sugar, posting gains last month, the United Nations food agency said on Thursday.”

Bloomberg writers Kim Chipman and Megan Durisin reported on Wednesday that, “Soybean futures in Chicago extended their winning streak for a sixth day and corn exceeded $5 a bushel on expectations that the U.S. will cut domestic supply forecasts for the crops.”

Last month, the Congressional Research Service (CRS) released a report titled, “USDA’s Coronavirus Food Assistance Program: Round Two (CFAP-2).”  Today’s update includes highlights from the report, which was authored by Randy Schnepf.

A news release last month from the USDA’s Agricultural Marketing Service (AMS) announced the release of a report, prepared in close partnership with the Department of Transportation,” titled: “The Importance of Highways to U.S. Agriculture.”

A news release Tuesday from the Center for Agricultural and Rural Development at Iowa State University and Iowa State University Extension and Outreach indicated that, “Favorable interest rates, a strong demand for land, and substantial government payments helped stabilize Iowa’s farmland market in a year in which Iowa’s farmers faced the destructive onslaught of a derecho, significant uncertainties in US agricultural trade, and a pandemic that significantly altered market demand.”

Last week, the USDA’s Economic Research Service (ERS) released its annual report exploring characteristics of U.S. farms: “America’s Diverse Family Farms: 2020 Edition.”  Today’s update includes highlights from the report, which was written by Christine Whitt, Jessica E. Todd, and James M. MacDonald.

Wall Street Journal writer Lucy Craymer reported late last week that, “La Niña is shaking up agriculture in an already-tumultuous year for commodity markets.”

Donnelle Eller reported on the front page of Friday’s Des Moines Register that, “Mid-Iowa Cooperative’s Mike Kinley sees a $275 million soybean processing plant under construction in eastern Iowa as a way for farmers to get more money for the crops they grow.”

On Wednesday, the Federal Reserve Board released its November 2020 Beige Book update, a summary of commentary on current economic conditions by Federal Reserve District. The report included several observations pertaining to the U.S. agricultural economy.

The USDA’s Economic Research Service (ERS) indicated on Wednesday that, “Net farm income, a broad measure of profits, is forecast to increase $36.0 billion (43.1 percent) from 2019 to $119.6 billion in 2020.”

Bloomberg writer Dominic Carey reported earlier this month that, “U.S. red-meat production surged to a record in October, months after the coronavirus disrupted slaughterhouses.”

Wall Street Journal writers Ryan Dezember and Kirk Maltais reported last week that, “Dry weather, China’s push to fatten its pigs and the lockdown-induced baking bonanza are lifting prices for U.S. row crops.”

A news release this week from the American Bankers Association (ABA) stated that, “As the farm economy continues to work through a prolonged downturn in the midst of an unparalleled, global economic dislocation, ag lenders remain focused on credit quality, according to the Fall 2020 Agricultural Lender Survey report produced jointly by the [ABA] and the Federal Agricultural Mortgage Corporation, more commonly known as Farmer Mac.”

Last week, the Federal Reserve Banks of Chicago, Kansas City and Minneapolis released updates regarding farm income, farmland values and agricultural credit conditions from the third quarter of 2020.

Brazil is expected to produce a record grain crop in 2020/2021, despite the drought that affected planting in some regions. On Tuesday, the National Supply Company (Conab) projected 268.9 million tons of grain production, 4.6% more than 2019/2020.