View from the Cab: Good time for producers
Keep those prices climbing!
Agriculture’s tough start to 2020 was offset by federal help and rising commodity prices later in the year. When this pandemic hit last winter and we faced uncertain spring planting weather, we wondered how low prices would go. Not only were we faced with the fear of the little-known COVID virus but we didn’t know if we would even breakeven.
My, how the times have changed as we have had several positive USDA reports in a row which a market analyst told me is pretty much unheard of these days. Those bullish reports led to higher corn, soybean and wheat prices in recent months. Last Tuesday’s November Crop Production and World Agricultural Supply and Demand Estimates reports pushed prices higher.
“As far as soybeans, we were looking for maybe a two-tenths of a bushel reduction and we went from 51.9 (bpa) to 50.7 and 51.7 is what we were looking for,” Wayne Nelson of L&M Commodities told me.
Soybean carryout went down from 290 million bushels to 190 million bushels. This is the reason we had the positive market response.
We often hear about the “harvest lows” hitting during the fall but this year it was more like the harvest highs. I cannot recall a time witnessing rising prices while in the combine. Usually we expect the exact opposite that time of year. Some predict our prices could keep climbing if the government keeps reporting dwindling supplies of corn and soybeans moving forward.
President Trump authorized Market Facilitation Program, or MFP, payments last year on a per-acre basis. MFP was intended to help farmers or ranchers whose commodities were directly impacted by foreign retaliatory tariffs. Those tariffs resulted in the loss of traditional export markets. USDA was authorized to provide up to $14.5 billion in direct payments for 2019.
Also, Coronavirus Food Assistance Program, or CFAP, payments were made to growers across the country this year. There were different formulas used for the second round of CFAP payments which made it easier for more farmers to qualify. Rather than trade disruptions, this program helped producers directly impacted by the 2020 coronavirus pandemic. More details can be found at the website: www.farmers.gov/cfap.