Who’s in agreement that a lot of unusual things happened in the agriculture industry this year?
Covid-19 Pandemic: The impact of food-chain disruptions, processing facilities and ethanol plants idled, and unknown future impacts caused ag futures to tumble. With more answers, adaptations, and understanding since those first few dark months, the Ag industry has rebounded and risen to the challenge of satisfying the world’s demand for essential commodities.
Derecho: A derecho in August was the most costly thunderstorm event in United States history. Along with loss of life and property, millions of acres of crops were flattened as well. NOAA pegged the damages at $7.5 billion, which could rise even higher after the complete agricultural impact is known.
Brazil Soy Imports: Brazil imported its first soy from the US since 1997 this summer, bridging a domestic shortage after China pressured stocks over the summer, favoring Brazil’s new-crop soy over the US beans in storage. The government suspended tariffs from non-Mercosur countries and amended non-GMO policies to fulfill their domestic demand.
China Buys Corn: Speaking of China, the substantial rise in their purchases of U.S. corn and a rosy forecast for more is pushing corn futures to their highest levels in a year. Declining reserves along with demand for animal feed as hog populations recover point to continued demand through mid-next year.
Mexico Can’t Meet Demand: Also putting pressure on US corn, some of the largest corn producers in Mexico, citing deep government cuts to the Agriculture ministry budget which resulted in almost entirely eliminating subsidies, are signaling that they won’t be able to meet domestic demand for corn. Large orders have already been placed, following their normal import pattern at harvest time to supply livestock feed needs, and many market-watchers believe this year’s demand from Mexican grains purchasers will outpace previous years.
Considering all the challenges we faced, to be standing upright and tall at the end of this year is a great accomplishment. Here’s to a better 2021!
