The agricultural sector will struggle over the next year because of the coronavirus pandemic, leading some farmers to quit or be forced out of business, said economist Allen Featherstone in a think tank paper released on Monday. (No paywall)
With production surging by 4.4 percent, corn will drive world cereal grain production to record levels in 2020/21, said the UN Food and Agriculture Organization in its first forecast of the new crops. It was the second forecast in a week of record global output as the planting season ends in the northern hemisphere.
World grain production will reach an all-time high of 2.23 billion tonnes, with record-setting wheat and corn harvests, said the International Grains Council on Thursday. The global inventory of all grains will rise for the first time in four years.
Low market prices will deter farmers from planting as much corn as they planned a month ago, but a record corn crop is still on the horizon, said two Purdue University economists on Monday. The mammoth crop would create the largest corn stockpile since the late 1980s while the already-large soybean stockpile grow bigger still.
In its first assessment since the coronavirus was declared a pandemic, the government forecast lower prices for U.S. crops and livestock as a worldwide economic slowdown, the result of aggressive efforts to squash the virus, weakens the global appetite for food. The notable exceptions are wheat and rice, where panic buying has driven up prices for the food grains, said the USDA on Thursday. (No paywall)
Corn and soybean plantings by U.S. farmers are sure to surge this spring, according to USDA and private analysts, but the coronavirus pandemic is creating uncertainty about whether there will be enough buyers for a bumper crops this fall. The economic slowdown is likely to reduce demand for corn ethanol, hitting corn growers in the wallet, but the alternative crop for many farmers, soybeans, faces a glut of its own.
The "phase one" trade agreement with Beijing will bring larger U.S. plantings of soybeans and cotton this spring than now projected by USDA, as growers aim for revived exports to China, analysts said over the weekend. China is the world's largest importer of the commodities but U.S. ag exports to China were halved by the tit-for-tat tariffs of the Sino-U.S. trade war.
Almost unnoticed, the USDA has shifted to an earlier reference point for an arcane but important document that helps shape the federal budget and provides a first look at the likely size of next year's crops. The change creates "additional uncertainties," said chief economist Robert Johansson on Monday, but the overall reliability of the 10-year agricultural baseline should be little affected.
The U.S. corn stockpile is the smallest in three years and a comparatively small crop, delayed by the rainiest spring in a quarter-century, is slow to come to harvest this year, the government said in a pair of reports on Monday. The soybean stockpile also is markedly smaller than expected, although it is still the largest on record.