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1.
FAPRI-MU Report - Food and Agricultural Policy Research Institute, College of Agriculture, Food and Natural Resources, University of Missouri|2021. (06-21):unpaginated. ; 2021.
Article in English | CAB Abstracts | ID: covidwho-1837871

ABSTRACT

The following text examines some impacts of the COVID-19 pandemic on U.S. agricultural and agricultural product markets, producers, consumers, and related indicators. We outline reasons why reviewing events in isolation in 2020 might not give reliable estimates of the impacts of the COVID-19 pandemic and might result in misleading expectations about a future pandemic. Next, we explore the effects of three key aspects of the shock in the United States: (1) lockdown impacts that reduced liquid fuel use dramatically, (2) disruptions in the livestock-meat sector supply chain, and (3) changes in overall economic activity, household income, and total expenditures. For these experiments, we use the FAPRI-MU stochastic model to simulate the impacts of a hypothetical future pandemic. This is not a study of the entire COVID-19 pandemic. The full impacts of the COVID-19 pandemic are large and complex. Factors include effects on health and mortality, a broader economic shock with its employment and income effects, lockdowns and reduced socializing, supply chain disruptions, policy responses, and similar shocks to other countries. The negative effects were experienced differently by each country. We focus only on the U.S. experience. We draw some conclusions from this and related work. * Market outcomes in 2020 were driven by factors other than the pandemic, such as a surge in crop exports and weather disruptions, so year-over-year changes alone are probably not good indicators of how the pandemic affected the sector. * Three of the largest direct impacts of COVID-19 on the agriculture sector were on fuel markets, meat supply chains, and consumer demand patterns. Demands for fuels fell by 5-10% after taking into account price and income effects. Margins between meat retail prices and livestock prices widened after considering other factors. * The loss of economic activity as measured by the falling U.S. GDP could have been expected to cause weaker demand for agricultural goods, lower prices, and sharply lower farm income than what was observed in 2020. * U.S. policy responses included payments that increased disposable income, boosted consumer demand, and mitigated the impacts on farm income from the drop in the size of the national economy. Greater payments directly to farmers also help explain why farm income rose in 2020 relative to 2019. * The impact of COVID-19 is partly a story of policy responses, including sector-specific actions targeting agriculture, fiscal policy, monetary policy, and lockdowns. A future pandemic might be set in a context that limits or disallows some of these options, or a setting that has - perhaps by design - new options. * A future pandemic's impacts would differ from recent experiences because of disease characteristics and also new individual, firm, and policy responses. If one assumes that a future pandemic is an exact repeat of the 2020 pandemic, then that implicitly requires that the disease is equally contagious and harmful, individuals and firms respond to a new pandemic the same as they did in 2020, and policy responses repeat the responses to COVID-19.

2.
FAPRI-MU Report - Food and Agricultural Policy Research Institute, College of Agriculture, Food and Natural Resources, University of Missouri|2021. (07-21):unpaginated. ; 2021.
Article in English | CAB Abstracts | ID: covidwho-1837567

ABSTRACT

An increase in farm commodity prices contributes to projected record farm cash receipts and net farm income in Missouri in 2021. A drop in government payments and rising production expenses could dampen the outlook for farm finances in 2022, but projected net farm income remains above the 2020 level for the next several years. The projections in this report update March 2021 estimates of Missouri agricultural markets and farm income. This report incorporates projections for US. agricultural markets included in the FAPRI-MU update published in early September 2021 FAPRI-MU Report 404-21, available at htips://www.faprimissouri.edu/publicationfaugast-2021-baseline-outlook-update/. The US. market update reflected information available in August 2021, including USDA production estimates of 2021 crop production and July 2021 macroeconomic forecasts from HIS Markit. Historical Missouri farm income data used in this report are from USDA's Economic Research Service, including estimates of 2020 Missouri farm income released on September 2, 2021. Key results of the projections for Missouri agricultural markets and farm income include: - Sharply higher prices for corn, soybeans, hogs and other farm commodities result in a $2.0 billion increase in Missouri crop cash receipts in 2021 and a $0.9 billion increase in livestock sector receipts. - Higher production expenses and reduced government payments offset part of the increase in cash receipts. Net farm income increases by $1.3 billion in 2021 over 2020, to a record $4.5 billion. - Projected Missouri crop acreage in 2022 is relatively stable. Crop receipts increase slightly in 2022 as farmers complete marketings of crops produced in 2021, but then fall back as prices for corn, soybeans and other crops moderate. - Livestock sector cash receipts dip in 2022, as projected declines in hog prices and receipts more than offset slightly higher cattle prices and receipts. In later years, modest projected increases in livestock sector production and higher cattle prices contribute to a slow increase in livestock sector cash receipts. - Direct government payments to Missouri farmers peaked at $1.5 billion in 2020, primarily because of temporary, ad hoc programs such as the Coronavirus Food Assistance Program (CFAP) and the Paycheck Protection Program (PPP). Projected payments decline in 2021, but remain large by historical standards. - This current-policy baseline does not assume any new ad hoc assistance programs beyond those announced by Au-gust 2021. In addition, higher commodity prices sharply reduce projected payments under the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs. As a result, projected direct government payments to Missouri farmers decline to $218 million in 2022. - Projected farm production expenses increase by almost $800 million in 2021, let by a sharp increase in purchased feed costs. Lower corn and soybean meal prices result in slightly lower feed costs in 2022, but increases in fertilizer expenses, machinery depreciation, and other cost categories result in a small net increase in Missouri farm production expenses next year. These projections should be considered a snapshot given information available in August and early September 2021. Final estimates of 2021 crop yields will differ from those in USDA's August crop report and farm output and input prices will change in response to shifting market conditions.

3.
FAPRI-MU Report - Food and Agricultural Policy Research Institute, College of Agriculture, Food and Natural Resources, University of Missouri|2021. (05-21):unpaginated. ; 2021.
Article in English | CAB Abstracts | ID: covidwho-1766869

ABSTRACT

Higher commodity prices contribute to a sharp increase in U.S. net farm income in 2021. Under current policies, farm income could drop again in 2022, as government payments decline and production expenses continue to rise. This report utilizes commodity supply, demand and price projections from the FAPRI-MU baseline update released in early September 2021 (FAPRI-MU Report #04-21, available at www.fapri.missouri.edu). Historical data are from USDA and include the revision to farm income accounts released by the Economic Research Service (ERS) on September 2, 2021. These baseline estimates reflect policies in place in late August 2021. It utilizes ERS estimates that farmers will receive about $18 billion in 2021 from pandemic-related programs such as the Coronavirus Food Assistance Program (CFAP), the Pandemic Assistance for Producers (PAP) initiative, and the Paycheck Protection Program (PPP). No further ad hoc assistance is assumed for 2022 and subsequent years, nor do these current-policy projections include any payments that might result from prospective legislation. Given the assumptions of the analysis, here are a few highlights of the results: * Projected 2021 net farm income reaches the highest level since 2013. Relative to 2020, a sharp increase in receipts from sales of crop and livestock products more than offsets the impact of higher production expenses and reduced government payments. * At $122 billion, projected 2021 net farm income exceeds that reported by ERS by several billion dollars. FAPRI-MU and ERS estimates of 2021 livestock sector receipts, government payments and production expenses are similar, but FAPRI-MU estimates higher receipts for corn, soybeans and other crops. * Total projected government spending on farm-related programs reaches a record $52 billion in fiscal year (FY) 2021. Spending on pandemic-related programs accounts for most of the outlays. Spending on 2018 farm bill commodity and crop insurance programs account for less than one-third of total expenditures on the selected programs in FY 2021. * Under current policies, government outlays drop to $22 billion in FY 2022, and government payments to farmers fall from $29 billion in calendar year 2021 to $6 billion in 2022. Conservation programs account for most 2022 government payments. * Projected market prices for several crops peak in the 2021/22 marketing year. As a result, feed grain and oilseed market receipts decline after 2021, but remain well above the levels of 2020. * In contrast, receipts for cattle, dairy and poultry all continue to increase each year. Hog receipts jump in 2021 with sharply higher barrow and gilt prices and then fall back in 2022 as prices moderate. * Higher costs for feed, purchased livestock, fertilizer and other farm inputs raise farm production expenses by $27 billion in 2021, and a smaller increase is projected for 2022. * In 2022, net farm income declines by $23 billion and net cash income falls even more sharply. Reduced government payments and higher production expenses explain the decline, as there is little net change in farm receipts. * In later years, projected net farm income remains fairly steady in nominal terms at just under $100 billion each year. After adjusting for inflation, real net farm income declines each year, and the projected value in 2026 is similar to that in 2019. * Rising asset values and slower growth in debt reduce the sector's debt-to-asset ratio in 2021 and 2022, temporarily reversing the trend of previous years. Lower projected farm income halts the rise in farm real estate values in 2023, and the debt-to-asset ratio again begins to increase. In contrast to the 2021 FAPRI baseline prepared earlier this year, these estimates do not consider market uncertainty. Small proportional changes in market receipts or production expenses can dramatically change the outlook for net income.

4.
FAPRI-MU Report - Food and Agricultural Policy Research Institute, College of Agriculture, Food and Natural Resources, University of Missouri|2020. (03-20):21 pp. ; 2020.
Article in English | CAB Abstracts | ID: covidwho-1490262

ABSTRACT

This report presents an update to the 2020 US Agricultural Market Outlook. The outbreak of COVID-19, as well as US government response to the outbreak, continues to impact agricultural markets, disrupting supply chains, shifting consumer demand and expanding government outlays. Outcomes of the analysis pertain to total spending on farm support and other conservation programs, farm income, projected developments and expansions, prices, and consumption. Presented data include macroeconomic and policy assumptions as well as the supply and use of various commodities such as corn, soybean, wheat, upland cotton, rice, poultry, and biomass-based diesel among others.

5.
FAPRI-MU Report - Food and Agricultural Policy Research Institute, College of Agriculture, Food and Natural Resources, University of Missouri|2020. (04-20):16 pp. ; 2020.
Article in English | CAB Abstracts | ID: covidwho-1451808

ABSTRACT

This baseline update uses 2020 acreage, yield, and production estimates included in USDA's August 2020 Crop Production report with a modest adjustment to Iowa corn yield to reflect derecho storm effect. The economy is assumed to evolve as forecast by IHS Markit in July 2020 with a sharp rebound in GDP growth rates but a multi-year path to achieve forecast pre-COVID levels. A few highlighted results are: (1) corn-planted area in 2020 is projected to be 92.0 million acres;(2)widespread shelter-at-home orders as a result of COVID-19 sharply reduced motor gasoline demand and with it domestic ethanol demand;(3) projected soybean-planted area rose to 83.8 million acres in 2020/21, up sharply from last year's weather impacted planting season;(4) wheat prices average about $4.80 per bushel over the next five years;and (5) supply chain disruptions due to COVID-19 have increased the cost of processing livestock and dairy products.

6.
FAPRI-MU Report - Food and Agricultural Policy Research Institute, College of Agriculture, Food and Natural Resources, University of Missouri|2020. (02-20):7 pp. ; 2020.
Article in English | CAB Abstracts | ID: covidwho-1407649

ABSTRACT

COVID-19 represents an unprecedented situation both for the economy and the agricultural sector, and thus there is a limit to which prior experience can guide the current analysis. This analysis is both preliminary and highly uncertain given the constantly evolving market conditions. The analysis considers only some of the ways in which COVID-19 may affect markets and is based on a series of assumptions, many of which may be overtaken by events. The objective is not to provide definitive estimates of impacts, but to identify some key issues and help readers develop some notion of the rough magnitudes of possible effects.

7.
FAPRI-MU Report - Food and Agricultural Policy Research Institute, College of Agriculture, Food and Natural Resources, University of Missouri|2020. (05-20):7 pp. ; 2020.
Article in English | CAB Abstracts | ID: covidwho-887908

ABSTRACT

Record government payments to farmers, tied to COVID-19 relief efforts, support farm income in 2020. If no new government programs are made available, government payments and net farm income both decline sharply in 2021. This report utilizes commodity supply, demand and price projections from the FAPRI-MU baseline update released in August 2020 (FAPRI-MU Report #04-20, available at www.fapri.missouri.edu). Historical farm income figures are from USDA's Economic Research Service, and reflect the revision made in early September 2020 to previous estimates of 2019 farm production expenses and farm income. The baseline estimates reflect policies in place in late August 2020. Based on existing program rules, Coronavirus Food Assistance Program (CFAP) payments are assumed to total $11 billion in 2020. The 2020 farm income estimates also incorporate Market Facilitation Program (MFP) payments associated with 2019 production that were made in the early months of 2020, as well as $5.8 billion in benefits under the Paycheck Protection Program (PPP). Additional support programs may be developed in the future, but they are not included in these baseline projections. This is one source of difference between these estimates and those of the Economic Research Service, which assumed that the full $16 billion allocated to CFAP would be used to make payments in 2020.

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