COVID-19 and China Key Factors in Latest FAPRI Analysis of US AgricultureThu, 27 Aug 2020 13:38:05 CDT
The University of Missouri's Food and Agricultural Policy Research Institute's latest baseline report reflects corn losses stemming from the derecho in Iowa earlier this month. FAPRI released its August baseline report Wednesday. According to the report, corn-planted area in 2020 is projected to be 92.0 million acres, a sharp decline from March intended acres. A modest downward adjustment in Iowa corn yields, given the derecho event, pushes the production estimate 203 million bushels lower than USDA's estimate to 15.075 billion, a record production volume. Carryout stocks sharply increase, and corn farm prices are expected to fall to $3.24 per bushel.
Meanwhile, projected soybean-planted area rose to 83.8 million acres in 2020/21, up sharply from last year. Soybean stocks hold steady in 2020/21 as a strong growth in exports is offset by a rebound in production, in part, on above-trend yields. Farm prices for soybeans hit a recent low of $8.24 for 2020/21.
The think tank believes that wheat prices will remain largely unchanged and will average around $4.80 per bushel- "given large global supplies and demand-side competition with corn. Wheat acreage continues to decline- falling below 44 million acres- on relative returns to corn and soybeans."
For the livestock sector- "Supply chain disruptions to COVID-19 have increased the cost of processing livestock and dairy products. These impacts should moderate in 2021 but will still pressure the producers' share of consumers expendictures."
FAPRI concludes in the summary of their Price Baseline update released August 26th that "Markets will continue to evolve as we get more information about the pace of economic recovery, the size of the 2020 crop and the state of the Phase One Trade Agreement fulfillment."
Click here for the complete report as released by FAPRI.
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