By former USDA Secretary John R. Block.
We still have some snow on the ground at our farm in Illinois, but it is a good time to plan next year’s crops. Which fields will be for corn and which for soybeans? What hybrids and seed numbers to plant in different fields? Can we expect better prices or just more of the same? Farm income made a record $123 billion in 2013. It went down from there and bottomed out at $62 billion in 2016, climbing to $78 billion last year. The carryover of corn has been on the decline each year since 2016. That has helped to lift income.
Keep in mind crop prices are a product of supply and demand. Supply could be big because we can’t expect another year with millions of acres unplanted and never harvested. Yields will probably be up. Price and volume are on one side and then on the other you have cost of production. We don’t expect a big move up in cost of seed, fertilizer, and crop protection. Don’t overpay for land rent and we might come out ahead. I predict we won’t get the kind of federal government support that we got last year. The trade war with China is fixed for this year, despite the Coronavirus. I think China will be a big buyer this year with African Swine Fever devastating their pork industry. They now have bird flu and have had to kill thousands of chickens.
The countries leading the increase in meat consumption are: China number one, U.S. second, followed by India, Brazil and Mexico. Remember all those animals are eating corn and soybean meal. That can lift our grain prices. We know that our farmers and ranchers are carrying more debt and have weathered some tough times in recent years. We can’t be sure, but this year should be better.
John Block was Secretary of the U.S. Department of Agriculture from 1981-1985, where he played a key role in the development of the 1985 Farm Bill. If you would like to review his radio shows going back more than 20 years, just go online to www.johnblockreports.com.