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AG ECONOMY INSIGHTS: MORE TREATS THAN TRICKS FOR 2021 AGRICULTURE ECONOMY
Oct. 18, 2021
Agricultural Economic Insights reports:
There has been no shortage of worrisome news for agriculture throughout 2021: growing ending stocks, higher input prices, and tax reform, to name a few. But while there are many risks and uncertainties on the watchlist, it is important not to lose sight of an overall positive story.
Strong Net Farm Income
In early September, the USDA updated its net farm income estimates. At $113 billion in 2021, sector profits are positioned to be the eighth highest since 1960 (in inflation-adjusted dollars).
The improved outlook hasn't been felt equally across all commodities, but the change in cash receipts has been most abundant in corn, soybeans, and hogs. Wheat, cattle & calves, and broilers are also higher.
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| Figure 1. Real Net Farm Income, 1929-2021 (2021=100). Series Average: $88.9 billion (in orange). Data Source: USDA’s ERS and aei.ag calculations. |
Record Early Corn Export Sales
September marks the beginning of the marketing year for corn and soybeans. This is a good time to review and benchmark activity. For the 2021/22 marketing years, early corn export sales - sales reported before the new marketing year began - exceeded 900 million bushels, a record. Probably not a surprise, but China is a big driver behind the uptick.
Early soybean exports sales are down from the record 2020/21 activity but remain historically strong and well above the trade war slump.
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| Figure 2. Early U.S. Corn Export Sales, Total, 1999/00 to 2021/22. Data Source: USDA FAS. |
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