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USDA Agricultural Projections Show Increased Soybean Acres in 2021

November 10, 2020

On Friday, the USDA’s Office of the Chief Economist (OCE) released selected tables prepared for the Department’s upcoming Agricultural Baseline Projections report.

The Department pointed out that, “The projections use as a starting point the short-term forecasts from the October 9, 2020 World Agricultural Supply and Demand Estimates report.

With respect to commodity prices, the USDA’s Economic Research Service explained that, “USDA projections for changes in nominal (not adjusted for inflation) U.S. farm prices between 2020 and 2030 indicate a mixed outlook shaped by the expected recovery in U.S. and global demand, continued export competition, and market conditions during 2020.

For crops, the strongest gains are projected for wheat and cotton. Wheat prices are projected to rise as domestic and export demand begin to outpace domestic production, while higher cotton prices are driven by a projected recovery in export demand.

Modest changes in prices for U.S. corn and soybeans from current levels reflect the relatively steady demand for these products during 2020, together with the moderating influences of productivity gains and continued export competition. Among livestock products, farm prices of hogs, broilers, and eggs are projected higher by 2030, as economic recovery restores growth in domestic and export demand. U.S. beef cattle prices are expected to rise during the early years of the 10-year projection period, before declining somewhat as the multi-year cattle cycle and a longer-term trend of sluggish demand growth turn prices downward.

“This chart is based on projections prepared by the USDA Interagency Projections Committee using data available as of October 9, 2020, and released by the Office of the Chief Economist on November 6, 2020.” (Economic recovery, competition shape projections of U.S. farm prices to 2030. USDA- Economic Research Service, Chart Gallery (November 9, 2020).

“The projections are based on an assumed long-term macroeconomic outlook that includes a recovery in income growth—beginning in 2021—from the declines that have occurred in most economies during 2020. The outlook for the U.S. economy, and for many important U.S. agricultural markets and competitors, however, remains uncertain.”

With respect to acreage, Friday’s update pointed to an increase in total planted acres in 2021.

Early-Release Tables from USDA Agricultural Projections to 2030. USDA- OCE (November 6, 2020).

More narrowly, soybean acreage in 2021 is projected to climb to 89 million acres.

And corn acres in 2021 are projected down slightly.

Early-Release Tables from USDA Agricultural Projections to 2030. USDA- OCE (November 6, 2020).

Meanwhile, wheat acres in 2021 are projected somewhat higher.

Early-Release Tables from USDA Agricultural Projections to 2030. USDA- OCE (November 6, 2020).

The Department added that the complete USDA Agricultural Projections to 2030 report will be released in February 2021.

Source: Keith Good, Farm Policy News