The USDA’s Food and Ag Policy Research Institute says the Market Outlook Report is uncertain, but it’s more optimistic than it was a few months ago. The most recent baseline projections for agricultural and biofuel markets were prepared using market information available as of January 2021.
The agency says commodity markets will continue to be volatile. Some of the key findings include major crop prices will retreat from recent peaks but remain above the prices from 2015-2019. Projected corn prices in 2021 will average $4.06 a bushel, and soybeans will average $10.61. Increasing Chinese imports are behind the recent strength in grain and oilseed markets. If China’s purchasing pace continues, exports and market prices could be higher than projected. However, if purchases falter, there is a downside risk as well. The report also says higher prices and assumed normal spring planting conditions would allow the 2021 total area planted to major crops to rebound to 2018 levels.
The average prices for livestock should increase this year as the sector returns to more normal operating conditions after the plant closures and other disruptions during last year. Lastly, after COVID reduced driving and fuel use in 2020, projected ethanol production and use will increase this year but won’t immediately bounce back to pre-COVID levels.