2021 Farm Economy Outlook

FloridAgriculture eNewsletter 2021

2021 Farm Economy Outlook

American Farm Bureau Federation economists discussed the outlook for U.S. crop and livestock production, how the election could affect farm policy and the many factors that will influence the U.S. farm profitability in 2021 during a live session of the 2021 AFBF Virtual Convention.

The future of America’s farm economy looks promising following a year that resulted in a record number of ad hoc financial support, trade wars and a global pandemic. According to economists with the American Farm Bureau Federation, farmers and ranchers remain optimistic about the United States’ farm economy in 2021.

One of the largest factors contributing to the positive outlook is trade with China which, according to AFBF Chief Economist John Newton, has the potential to reach record levels. A large increase is expected in pork, beef and poultry exports to China in 2021. Recent data from the USDA shows that since 2019, U.S. beef exports to China have gone up 132%.

Despite tariffs, China’s world imports have risen and the country looks to the U.S. as an export partner of grains and oilseeds. COVID-19 relief and a market rally are also contributing factors. The new COVID-19 Relief Package includes $13 billion in support for agriculture. The financial assistance will help livestock, poultry, dairy, non-specialty and specialty crop producers continue to recover from COVID-19 disruptions.

In May of 2020, multiple meat processing plants were forced to shut down due to the public health emergency. AFBF Economist Michael Nepveux says that plant shutdowns are unlikely in 2021 due to the progress the U.S. has made in the fight to combat the virus.

As of early January, grocery store dollars remain above pre-COVID levels and the food service dollars remain below pre-COVID levels.

Due to the pandemic, the United States drought did not get much coverage, but Nepveux fears that 2021 will be different with over 50% of the U.S. currently in D1-D4 drought, especially the Western region.

Shelby Swain Myers is an economist at AFBF with a focus on crop and specialty markets. According to Myers, the coronavirus has been disruptive to agriculture. With the current Farm Bill expiring in 2023, certain components of production agriculture need a stronger safety net, including the dairy industry.

A boost in conservation programs, working land programs, crop insurance and additional financial resources are all aspects that will need to be improved according to Myers. Corn and soybean prices have rallied significantly and an expansion in soybean acres is expected in 2021.

Following a global pandemic and a multi-year trade war, a record amount of ad hoc financial support from the federal government pushed U.S. net farm income to $103 billion in 2020. The American Farm Bureau Federation’s economic experts will discuss the outlook for U.S. crop and livestock production, how the election could affect farm policy and the many factors that will influence U.S. farm profitability in 2021.

Following a global pandemic and a multi-year trade war, a record amount of ad hoc financial support from the federal government pushed U.S. net farm income to $103 billion in 2020. The American Farm Bureau Federation’s economic experts will discuss the outlook for U.S. crop and livestock production, how the election could affect farm policy and the many factors that will influence U.S. farm profitability in 2021.