‘Cautiously optimistic’ for ag
Oct 30, 2009 9:53 AM
Net cash farm income is forecast to fall to $68 billion in 2009, down a staggering $30 billion from a record $98 billion in 2008.
Speakers painted a “cautiously optimistic” outlook for U.S. agriculture at Farm Bureau’s mid-October commodity outlook conference, in Albuquerque, N.M. They expect crop and dairy producers will likely fare better than livestock producers who will still face challenges in the year ahead.
Joe Glauber, the Agriculture Department’s chief economist, told the conference that grain and oilseed demand remains strong, and relatively low ending stocks means that markets still have the potential for some price volatility. For livestock, Glauber does see price recovery, with higher prices forecasted for 2010.
“Farm income should improve in 2010 if input costs do not spike as they did in 2008,” Glauber said. For 2009, net cash farm income is forecast to fall to an aggregate $68 billion in 2009, however, down a staggering $30 billion from a record $98 billion in 2008.
“Both crops and livestock were hit pretty hard this year,” Glauber said.
All things considered, agriculture is weathering the current economic downturn “pretty darn well,” thanks in a large part to exports, said Mike Dwyer, director of the trade and biofuels division of USDA’s Foreign Agricultural Service.
“For the last two years, exports accounted for 33 percent of cash receipts for agriculture. Trade is a major driver of prosperity for farmers and ranchers,” Dwyer said. “Agriculture and aviation are the only two industries in the United States that are net exporters.”
With most private economists forecasting a falling dollar in the year ahead, Dwyer sees a rise in U.S. farm exports, which makes the U.S. more competitive overseas. For the long-term future, Dwyer said U.S. agriculture needs to focus on exports to developing countries with an expanding middle-class population.
“The middle class in developing countries is where the action is going to be. Agriculture should be very optimistic about the long-term future. It all starts with demand, and demand is expected to improve in these developing countries,” Dwyer said.
