The farm economy, battered since 2018 by a trade war and a pandemic, is rallying, though it is too early to declare a return to prosperity, said the president of the largest U.S. farm organization on Thursday, reserving judgment on whether more stopgap federal aid will be needed. In an interview on the final day of the group’s annual meeting, president Zippy Duvall said the American Farm Bureau Federation would take no position on the impeachment of President Trump this week.
President-elect Joe Biden says he wants American agriculture to be the first in the world to achieve net-zero emissions of greenhouse gases as part of a nationwide effort to mitigate climate change. “We just want to make sure that these projects that come forward are based on sound science and market-based, and they’ll be voluntary for farmers to use,” said Duvall.
Land stewardship programs have traditionally been voluntary for U.S. farmers. The incoming administration reportedly may create a “carbon bank” at the USDA to assist producers in adopting climate-smart practices. According to some analysts, farmers could earn money through carbon exchanges by sequestering carbon in the soil and in forestlands.
Commodity prices are up sharply since last summer, and the USDA estimates that the 2020 corn and soybean crops will fetch their highest average price in seven years, bolstering farm income. Last year, federal payments accounted for 39 percent of net farm income, a USDA measurement of farm profitability.
“It really depends on what happens in weather in South America, how the Biden administration will move forward with trade, and what they’ll do with the phase one China agreement, because it’s been a very positive move in the trade area,” said Duvall when asked about the prospects of a return to farm prosperity. Dry weather in South America has raised the possibility of tighter world grain supplies and higher prices. China is forecast to buy record amounts of U.S. farm exports this fiscal year.
When asked about seeking additional federal support, Duvall said, “Right now, we haven’t made that decision. We need to see where [commodity] prices are going to go and how these trade deals are going to be handled.”
The $900 billion coronavirus package enacted at the end of 2020 provided $13 billion for agricultural aid. Last year, the USDA distributed $23 billion in pandemic assistance.
Agricultural lender CoBank said in a quarterly report that it expects U.S. economic recovery this year, although it would be summer “before the economy really begins to gain steam,” with growth running at 4.5 percent to 5.5 percent in the second half of the year. “While the economic outlook has improved, significant risks remain,” said Dan Kowalski, CoBank vice president. He cited the possibilities of business bankruptcies, a slower-than-expected recovery from the pandemic, and persistently high unemployment among the risks.
Delegates to the AFBF convention called for revisions to the H-2A visa program so that agricultural guestworkers could be employed year-round as well as seasonally. They also advocated for greater transparency in sales prices for livestock and changes to crop insurance to reduce food waste.
The CoBank report is available here.