2021 Ag Outlook Positive With Uncertainties

The 2021 Agricultural outlook is “positive” but with “uncertainties,” according to USDA’s Chief Economist Seth Meyer at this year’s first virtual Ag Outlook Forum. Meyer told the 97th Annual Agricultural Outlook Forum on “Building Innovation—a Pathway to Resilience.” Meyer says, “I think both the prospects for crops and livestock are good, based upon continued strong domestic demand and good exports. We need both, in order to achieve those prices that we forecast.”

 

With USDA now forecasting fiscal ’21 exports at $157 billion, Meyer says, “We got a record export, fiscal ’21, export values, strong demand from China. Trade, and particularly trade to China is going to be a key element for 2021, and that’s both for the crop and livestock sectors.” But Meyer says this year is also marked by uncertainties in disposable incomes, consumer demand, supply chains, shipping container costs and more and goes on to say, “How we go back to sending our children to school, how, or if, we maintain Food Box programs and what they contain.”

 

With big impacts on volatile dairy prices and fruits and vegetable demand. However, Meyer says farm receipts and income will rise, not everywhere, but likely in the Midwest with its staple crops and livestock, helping replace government payments. “We expect that those COVID payments will withdraw, they’ll shrink a little bit this year, and we expect though, alternatively, that we’ll have a sharp increase in cash receipts.”

 

The Biden Administration already froze CFAP as the new team reviews program costs, gaps and dollars left in key areas—talks Meyer expects to start in earnest if as expected Tom Vilsack is confirmed again as Secretary next week.