2022 U.S. agricultural market outlook: FAPRI-MU Report #02-22

ABSTRACT

Unexpected events have caused great uncertainty and volatility in agricultural markets in recent years. Trade disputes, the COVID-19 pandemic and now the war in Ukraine have added to the natural uncertainty caused by weather and other factors. Farm commodity prices and consumer food prices are far higher than would have been expected a few months ago, but so are production expenses. This report summarizes baseline projections for agricultural and biofuel markets prepared using market information available in January 2022. We recognize that much has happened since then, and some of the possible implications are discussed throughout the report and especially in the information on page 4. Macroeconomic assumptions are based on January forecasts by IHS Markit (S&P Global), many of which would be affected by recent events. The baseline reflects current policies, meaning it incorporates programs that had been enacted prior to January 2022, but does not reflect any subsequent policy changes. We use our models to develop a range of projected market outcomes that takes into account some major sources of uncertainty about future supply and demand conditions.In some of the resulting 500 outcomes, prices, quantities and values are much higher or much lower than the averages reported here.