Following a challenging year in 2020, farm economists continue to provide outlooks for the Ag sector in 2021.
During the American Farm Bureau Federation?s virtual convention, AFBF livestock economist Michael Nepvuex discussed several issues that are expected to impact US livestock production this year. One of the top factors that could influence farm profitability is relations with China, according to Nepvuex.
?The first on my list is the big elephant in the room and that is China,? Nepvuex said. ?Are they going to continue to demand the level of animal protein that they have over the last few years? Looking back to what is driving these increases is actually going back to 2018 and the outbreak of African Swine Fever within the country. This was in the news for several years. It seems like there has been so much going on with trade wars this past year that this slipped into the back of a lot of people?s minds. It?s still very much a driver in the livestock and protein market.?
Following a global pandemic and a multi-year trade war, a record amount of ad hoc financial support from the federal government pushed US net farm income to $103 billion in 2020. Nepvuex says the livestock industry will be closely be watching how the response to the pandemic continues to unfold.
?Moving forward through 2021, it?s looking like we?re probably in much better shape to handle this, but this is still very much something to watch for in 2021,? Nepvuex said. ?If I?m a betting man, I?m willing to say that even if we would look at another wave of coronavirus, most of the processing plants have figured out the best way they can deal with it. Even though we might still see some disruptions and some plants go down, I don?t believe we will see it to the same magnitude that we saw in the late spring and early summer of 2020.?
Recovery in the foodservice sector and the spread of drought in the US are two other key issues that Nepvuex believes could impact livestock production in 2021.
