On Wednesday, the Federal Reserve Board released its August 2021 Beige Book update, a summary of commentary on current economic conditions by Federal Reserve District.
Farm Policy News
USDA Attache Update from Beijing Highlights Soy Variables, as Ida Related Export Delays Persist
Last week, a report from the USDA’s Foreign Agricultural Service (FAS) post in Beijing (“China: Oilseeds and Products Update“) stated that, “Soybean imports are forecast at 101 million metric tons (MMT) in marketing year (MY) 21/22, up 3 MMT from the previous year.”
2021 Farm Sector Income Forecast, September
The USDA’s Economic Research Service (ERS) indicated on Thursday that, “Net farm income, a broad measure of profits, is forecast to increase by $18.5 billion (19.5 percent) from 2020 to $113.0 billion in 2021.”
Uncoupled Variables Scramble Agricultural Export Flows
Recent news articles have highlighted independent developments that are impacting agricultural export markets.
Ida Aftermath Stymies Grain Exports as Trade Routes Altered, China Eyes Brazil Soy
Reuters writers Karl Plume and PJ Huffstutter reported this week that, “Grain shippers on the U.S. Gulf Coast reported more damage from Hurricane Ida to their terminals on Wednesday as Cargill Inc confirmed damage to a second facility, while power outages across southern Louisiana kept all others shuttered.”
China’s Import Demand for Corn in Focus, as Brazil’s First Corn Planting Underway
Alfred Cang reported this week at Bloomberg that, “China’s record corn-buying spree — a cornerstone of its trade deal with the U.S. — may be running out of steam, with risks growing that imports by the top buyer will fall short of U.S. official estimates.”
Hurricane Ida Brings Flooding, and Damage to a Grain Terminal -Export Flows a Concern
DTN Meteorologist John Baranick reported earlier this week that, “Hurricane Ida made landfall near Port Fourchon, Louisiana at 11:55 a.m. on Aug. 29, 2021 as a strong Category 4 hurricane with maximum sustained wind speeds at landfall of 150 mph.”
USDA Attache Update from Beijing Highlights Hog and Pork Variables
A report on Thursday from the USDA’s Foreign Agricultural Service (FAS) post in Beijing (“Livestock and Products Annual”) stated that, “In 2022, hog production will decline by 5 percent due to low inventories and a smaller sow herd, which resulted from significant slaughter and delayed restocking in 2021.”
USDA Forecasts Record Farm Exports in FY 2021 and FY 2022
On Thursday, the USDA released its Outlook for U.S. Agricultural Trade, a quarterly report from the Department’s Foreign Agricultural Service (FAS) and Economic Research Service (ERS). Today’s update includes highlights from the report, which was coordinated by Bart Kenner, Hui Jiang, and Dylan Russell.
Canada’s Crop Production Marred by Drought, Brazil’s Next Crop Outlook Improves, as Transportation Costs Rise
Bloomberg writer Marcy Nicholson reported this week that, “Canada, the world’s biggest canola grower and a major wheat producer, forecasts a 26% drop in supplies of its main crops as drought ravages output and inventories shrink.”
Inflationary Pressures and Drought Jolt Farmers, While Unpredictable Grocery Supply Issues Persist
Earlier this week, Bloomberg writers Kim Chipman and Michael Hirtzer reported that, “Minnesota farmer Jason Knopik didn’t sell corn earlier this year as prices soared, missing out on one of the biggest rallies in a generation. Now he’s grappling with inflation.”
Drought Continues to Impact U.S. Crops
Wall Street Journal writer Kirk Maltais reported on Tuesday that, “Drought is blistering key U.S. cash crops, further elevating prices for staples including corn and wheat.”
African Swine Fever Recovery in China, a Variable Impacting Feed, Pork Imports
Reuters News reported last week that, “China’s soybean imports from top supplier Brazil fell in July from the previous year, customs data showed on Friday, as poor crush margins weighed on demand.”
EPA to Propose Biofuel Blending Mandates for 2021 to Below 2020 Levels, Sources Say
Late last week, Reuters writers Stephanie Kelly and Jarrett Renshaw reported that, “The U.S. Environmental Protection Agency is expected to recommend to the White House reducing federal biofuel blending mandates for 2021 to below 2020 levels in what would be a blow to the biofuels industry, two sources familiar with the matter said on Friday.”
Variables Add to Challenges of Higher Global Food Prices
Financial Times writers Emiko Terazono and Michael Pooler reported this week that, “After enduring the worst drought in nearly a century followed by a bout of cold temperatures, areas within Brazil’s farming belt are braced for further adversity as the La Niña weather phenomenon threatens to bring more dry conditions later this year.”
China’s Hog Herd Expands, But Sow Numbers Fall in July- U.S. Corn Exports at Record Levels
Earlier this week, Reuters writers Min Zhang, Shivani Singh and Dominique Patton reported that, “China’s sow herd declined for the first time in nearly two years, contracting 0.5% in July from the previous month, state media said, after a plunge in hog prices pushed many farmers to get rid of unproductive sows.”
Food Stamps Get Permanent Boost, as USDA Updates the Thrifty Food Plan
Jason DeParle reported on the front page of Monday’s New York Times that, “The Biden administration has revised the nutrition standards of the food stamp program and prompted the largest permanent increase to benefits in the program’s history, a move that will give poor people more power to fill their grocery carts but add billions of dollars to the cost of a program that feeds one in eight Americans.”
Global Wheat Supplies Contract, Impacting Exports, and Food Prices
Late last week, Bloomberg writers Megan Durisin, Kim Chipman, and Khadija Kothia reported that, “Crop losses in two of the world’s biggest wheat exporters and quality concerns in a third have pushed prices to multiyear highs, adding to worries about food price inflation for millions of the world’s most vulnerable.”
Federal Reserve Ag Credit Surveys- 2021 Second Quarter Farmland Values Climb
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 second quarter of 2021.
Grocery Costs of Meats, Poultry, and Dairy Rise in July
Financial Times writer Colby Smith reported on Wednesday that, “The rapid pace of US consumer price increases steadied at a 13-year high in July while month-on-month gains moderated slightly, as inflationary pressures persisted because of supply-chain constraints and soaring demand.”