After a year of unpredictable weather extremes, amidst a global pandemic, growers are now experiencing what had become a foreign feeling: hope and optimism for the future.
According to The Daily Scoop’s report on a recent survey of farmers, 44.6% of growers said they feel positive about the overall farm economy, while 61.7% are optimistic about their own farm’s overall financial health. This marks a significant increase over previous years.
Best of all, these feelings of hope are backed up by numbers. According to USDA’s income forecast, net farm income increased an estimated 43% (or, $36 billion) from 2019 to 2020.
A Reason for Optimism: The Soybean Market
One of the reasons that farmers are feeling encouraged about the 2021 growing season is thanks to the soybean market.
After a tumultuous 2020, the outlook on the soybean market looks bright for 2021. In fact, in just three months, the soybean market has increased by over 30%. What was once a point of worry for growers, now looks to be a promising trend as the new year continues.
During August 2020, the USDA predicted that the U.S. would carryover 610 million bushels, before updated estimates showed a decline to only 190 million bushels by November. One of the biggest reasons for the late-in-the-year rally was an increase in soybean export sales, primarily to China. Compared to 2019, this was an increase in exports of nearly 1 billion bushels.
That, accompanied by a poor end to the 2020 growing season, has led to surging soybean prices that have farmers excited for the future. In a recent 10-year forecast released by USDA, soybean acreage is expected to increase by 7% in 2021, which would be the third-highest acreage on record.
Effects on Other Aspects of the Industry
After seeing increased profits and the direction of the soybean market, many farmers now feel more optimistic about other areas of the industry. Specifically, they feel confident in their ability to invest in farming equipment and operations.
According to Perdue University, the number of farmers looking to increase machinery purchases over the next year rose by 15%. And, 65% of those surveyed expect to see farmland values rise over the next 5 years.
After a difficult 2020, it’s a relief to see encouraging numbers for farmers and we look forward to seeing even more progress in 2021. Continue to check back here for the latest in agriculture news throughout the year, as we monitor changes in the industry.