Farm income and land values surged in the closing months of 2020, lifted by higher commodity prices and large federal payments, according to farm lenders across the Midwest and Plains. With the commodity rally expected to persist, the farm economy was in its best shape in years, said the …
U.S. farm income will be a strong $111.4 billion this year, 20 percent above the 10-year average, thanks to a recovery in crop and livestock revenue and larger than usual federal payments, said the USDA. Higher market prices, particularly for corn, soybeans, cattle and hogs, and larger production were forecast to boost farm receipts by $20.4 billion from 2020's level.
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.
Congress allotted the same amount of funding for public nutrition programs that it did for agriculture in the new coronavirus relief bill, even though hunger is on the rise, wrote three economists on Tuesday. "An obvious way to address the problem would be to shift all or most of the $13 billion earmarked for farmers to federal nutrition programs that serve hungry families in real need," the economists said in an essay in The Hill.
The final coronavirus aid package of the year would direct 3 percent of its $900 billion in funding to food assistance and relief for agricultural producers, according to its Democratic and Republican sponsors. "It's a deal that must come together," said one of the sponsors, Sen. Joe Manchin of West Virginia, on Sunday.
Despite the effects of the pandemic and the trade war, U.S. farm income this year will be the highest since 2013 because of the largest federal payments ever — $46.5 billion, triple the usual amount, the government said on Wednesday. Think tank analysts said farm income would fall in 2021 with the expiration of Trump-era bailouts, but the drop-off will be lessened by the ongoing rally in commodity prices and increased ag exports.
Farm income recovered this summer from the steep coronavirus-driven declines of last spring, according to ag bankers in the Plains and Midwest who took part in Federal Reserve surveys. "An influx of government payments and higher prices for agricultural commodities provided greater support for farm finances in the third quarter and seemed to limit demand for financing," said a summary by two Kansas City Fed economists.
World leaders must remain vigilant to keep food trade flowing during the pandemic and to continue using trade as a lever to improve farm income and productivity, said the head of the UN Food and Agriculture Organization on Sunday. Speaking during the Group of 20 summit held online, director general Qu Dongyu said, "It is essential for the G20 to keep working on preventing this health crisis from becoming a global food crisis."
Crop and livestock prices have rebounded from coronavirus lows last spring and could bolster farm income as massive federal payments recede in 2021, said economists at a farm conference on Monday. Cortney Cowley of the Kansas City Federal Reserve cautioned “the path of this recovery is …
The government's coronavirus relief programs are an important shield for farmers and ranchers battling a sharp drop in income in the central Plains, ag lenders said in a Kansas City Fed survey released on Thursday. A similar survey of ag bankers in the Midwest by the Chicago Fed "revealed the broad financial distress from the Covid-19 pandemic in rural areas."