YOUR TEXAS AGRICULTURE MINUTE
Market outlook offers grim forecast
By Gary Joiner
One of the best to gaze into agriculture’s crystal ball is the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri. The institute offers market outlooks.
The outlook it published the first week in June is sobering.
The institute says net farm income in 2020 is expected to decline 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.
Next year does not offer much encouragement, either. Given projected market developments and the assumption of no new government payment programs, both net farm income and net cash income are forecast to decline again in 2021, with net farm income falling below $80 billion.
Corn prices received by farmers this year are forecast to fall to $3.06 per bushel. Soybean prices are expected to fall to $8.21 per bushel. The institute says wheat prices will average about $4.60 per bushel over the next five years given large global supplies and demand‐side competition with corn.
Lower global textile demand has contributed to lower cotton prices in the 2019/20 marketing year, and projected production exceeds use again in 2020/21, resulting in an even lower price.
For livestock producers, steer prices are forecast to decline by more than $3 per hundredweight in 2020, and hog prices by nearly $5 per hundredweight. This is largely because of COVID-19-related foodservice slowdowns and the temporary packing plant closures.
The institute says after several years of strong growth, total per-capita consumption of beef, pork and poultry is projected to decline in 2020 as the pandemic pushes up retail prices and reduces consumer disposable income.
It’s the nature of Texas farmers and ranchers to look forward and plan for better times. But outlooks like this test that resolve, and many difficult decisions lie ahead. Our Texas farm and ranch families are facing a long, hard year.
The preceding commentary is brought to you by Texas Farm Bureau, the “Voice of Texas Agriculture.” Called “Your Texas Agriculture Minute,” TFB will issue thought-provoking editorials each week—via print and audio—to spark understanding of agriculture in the Lone Star State and its impact on each and every Texan.
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