Menu

FAPRI-Baseline Update for U.S. Agricultural Markets

On Tuesday, the University of Missouri’s Food and Agricultural Policy Research Institute (FAPRI) released its June Baseline Update for U.S. Agricultural Markets.   The update incorporates government payment programs that were announced before June 1, 2020 and analyzes some of the market impacts of those programs.

After outlining important assumptions, the FAPRI report included key outcomes relating to government payments, farm income, as well as corn and soybean prices.

“Total federal spending on various farm support and conservation programs in the current fiscal year reaches a record $50 billion,” the report said.

FAPRI baseline update shows direct payments to farmers at record $32.8 billion in 2020. See full report at https://t.co/dEUGNBHMQX pic.twitter.com/UoT9HYlDDp

— Pat Westhoff (@WesthoffPat) June 9, 2020

The FAPRI update indicated that, “Net farm income in 2020 declines by about $3 billion in spite of record government payments of $33 billion. Another farm income measure—net cash income—declines by $18 billion in 2020, with much of the difference in the two measures explained by changes in inventory values.

Even with record government payments, our new update shows net farm income and net cash income down in 2020. Both decline further in 2021. For the full update: https://t.co/dEUGNBHMQX pic.twitter.com/Ji2mKn7vkz

— Pat Westhoff (@WesthoffPat) June 9, 2020

With respect to corn variables, the FAPRI report stated that, “Corn-planted area in 2020 is projected to be 96.0 million acres, second only to 2012 in the modern era but 1 million acres below the March intentions report. Record production of 15.5 billion bushels for the 2020/21 marketing year causes carryout stocks to build and corn prices received by farmers to fall to $3.06 per bushel. While acreage moderates in subsequent years, prices rise only modestly.”

U.S. Corn Supply and Use. “Baseline Update for U.S. Agricultural Markets.” Food & Agricultural Policy Research Institute – University of Missouri. FAPRI-MU Report #03-20 (June 2020).

More narrowly on ethanol use, FAPRI explained that, “Widespread shelter-at-home orders as a result of COVID-19 sharply reduced motor gasoline demand. Within a year, biofuel policy allows ethanol mandates to fall with unanticipated demand declines, cutting domestic biofuel use. Falling oil prices also provide headwinds to ethanol exports.

As a result, corn used for ethanol production for 2019/20 is the lowest since the drought year of 2012/13, when corn supplies were the limiting factor. Corn used for ethanol largely rebounds in 2020/21 as fuel demand returns and mandates are reset for calendar year 2021.

Turning to soybeans, Tuesday’s report noted that, “Projected soybean-planted area rebounds to 84.5 million acres in 2020/21, up 8 million acres from 2019 and 1 million acres from the planting intentions report. Soybean stocks decline in 2020/21 but remain above 500 million bushels; prices fall to $8.21 per bushel. A rebalancing of corn and soybean area results in a further increase in soybean production in 2021 and soybean prices bottom out at $8.00 per bushel.”

U.S. Soybean Supply and Use. “Baseline Update for U.S. Agricultural Markets.” Food & Agricultural Policy Research Institute – University of Missouri. FAPRI-MU Report #03-20 (June 2020).

Among livestock variables, the FAPRI report noted that, “U.S. pork export growth in 2020 offers price support, with much of the growth in exports headed to China.”

U.S. Pork Sector. “Baseline Update for U.S. Agricultural Markets.” Food & Agricultural Policy Research Institute – University of Missouri. FAPRI-MU Report #03-20 (June 2020).

Tuesday’s report added that, “After several years of strong growth, total per-capita consumption of beef, pork and poultry consumption is projected to decline in 2020 as the COVID-19 crisis pushes up retail prices and reduces consumer disposable income.”

Source: Keith Good, Farm Policy News

Recent News

Fall-applied Herbicides-What Goes Around Comes Around
9/22/2020

Fall herbicide treatments have fallen off over the past several years for a couple of reasons, among them the effectiveness of new soybean trait systems for managing marestail, some generally crappy weather in late fall, and efforts to reduce input costs.  We are seeing a resurgence in some weeds, such as dandelion, which respond well […]

New Round of Farm Aid for COVID Losses Announced, and Causes Snag in Congressional Spending Bill
9/22/2020

Andrew Restuccia and Jesse Newman reported in Friday’s Wall Street Journal that, “President Trump unveiled $13 billion in new aid to farmers facing economic harm from the coronavirus pandemic as he aimed to boost support among rural voters at a campaign rally. ‘I’m proud to announce that I’m doing even more to support Wisconsin farmers,’ said Mr. Trump, speaking outside […]

Corn Silage Needs Adequate Moisture to Ferment
9/18/2020

Early season frost is challenging for corn silage producers, according to Karl Hoppe, Extension livestock systems specialist at NDSU’s Carrington Research Extension Center. Frost makes an abrupt end to the corn-growing season. This begins the dry-down period for the corn plants. “Good corn silage fermentation requires adequate moisture to reduce dry-matter loss and spoilage,” Hoppe […]

Your browser is out-of-date!

Update your browser to view this website correctly. Update my browser now