At the start of 2020, the agricultural economy was poised for a good year.
Then came COVID-19 and like almost every other sector, it tanked. But Chad Hart, an economist at Iowa State University, says that solid footing is still the foundation for an outlook that is not all doom and gloom.
Hart says the World Agricultural Supply and Demand Estimates that the U.S Department of Agriculture released this week suggest the growing season and 2020 harvest may be tough, but not devastating. Higher yields will offset lower prices. And Hart says COVID recovery should bring about some of the relief from trade tensions that economists anticipated.
“They’re looking for that strength to still be there, to return, as we reopen the economy, as we get the global economy moving along,” he says.
Lower prices for corn and soybeans may draw some new or less common uses for the crop, especially if the harvest is as big as predicted.
“As prices drop, suddenly you’re like, okay I didn’t used to use corn before in this, but I can… and corn is now inexpensive enough that it makes sense for me to do that,” Hart says. “So you would see other uses pop up.”
But even more likely, Hart says, is that farmers will use some of their quieter time in June and July to consider alternative crops for 2021, especially if this year brings them any more unwelcome hurdles in corn and soybeans.