AFBF's John Newton Says We Have Many Things to be Thankful For Including Affordable Food and More Farm Profitability in 2021Thu, 19 Nov 2020 16:28:50 CST
There are many things for farmers, ranchers and consumers to be thankful for going into the Thanksgiving holiday and at the top of the list for consumers is more affordable food. American Farm Bureauís annual Thanksgiving Day dinner survey shows traditional holiday items will be a bargain, said Farm Bureau Economist John Newton.
Newton was recently interviewed by Radio Oklahoma Ag Network Farm Director Ron Hays.
This year we had more than 230 volunteer shoppers surveying prices for that classic dinner for ten people, Newton said.
What we found is the average price came in at $46.90 and that is down 4 percent from last year, Newton said.
He noted this is the lowest price in 10 years lead by turkey prices at $1.21 per pound, which was down nearly 7 percent helping make that meal more affordable.
I think COVID-19 is going to result in families having smaller groups with plentiful, affordable turkey, Newton said.
In regard to other Covid impacts, Newton said the governmentís CFAP payments have been a big help for farmers and ranchers.
If Congress had not come up with the assistance, agriculture would be in a much different position today, Newton said. The outlook for 2020 has improved and for 2021 it is better going into planting season next spring, he said.
Looking ahead to expected market prices for grain and livestock commodities, the AFBF economist is optimistic for the coming year.
On the crop side, supplies got tight in a hurry with acreage cuts and strong demand this year, Newton said.
Ending stocks for corn and soybeans are low so moving into 2021 we see competitive race for acres for corn, soybeans and wheat, he said.
On the livestock side the market has done a 180-degree flip on pork as prices have gone through the roof compared to spring due mainly to strong demand from China, he said.
Things will get better on the other side of this Covid, thing thatís for sure, Newton said.
The pandemic added to the list of concerns for cattle producers worried about adequate price discovery. Newton said that is one of the hot topics going into the annual American Farm Bureau business session in January.
Farm Bureau members will work on new policy at the virtual business session in January and much of the focus will be on cattle market transparency, Newton said.
All eyes are on the cattle market and I am certain when we come out of our convention in January, we will have an updated policy on these issues, Newton said.
Newton is optimistic the dark days of the pandemic are behind us and the future looks better as the entire food supply chain has adjusted.
When we were at the height of this pandemic the number of animals (pork) that had to be euthanized was significant, but we have come a long way since then, he said.
In terms of profitability for agriculture in the coming year Newton expects improvements.
Farmers will continue to look for ways to cut costs in 2021 yet machinery manufacturers indicate combine purchases are at a five-year high right now, he said.
Newton is concerned the biggest component that could drive aggregate farm profitability lower in 2021 is less government payments.
Folks want to farm for the market, not the government support and hopefully we will see stronger markets, Newton said.
Click on the listen bar below to hear more of Ronís interview with John Newton.
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