News

COVID-19 causing mixed outlooks for ag

The latest quarterly report by CoBank says the severity of the coronavirus pandemic has varying impacts through the agricultural sector.

The report says despite the pandemic, U.S. grain is moving, and basis has been tightening since April 1.  Wheat exports and domestic demand is also strong.  Analysts say ethanol margins have waivered with renewed COVID-19 restrictions in some states, but they expect ethanol fuel demand to recover next year to almost 90 percent of pre-COVID levels.

While beef production and prices are near pre-pandemic levels, analysts say concerns have shifted to the demand side as foodservice challenges are expected to persist.  The pork industry is also starting to rebound as processors work through a backlog of hogs.

Knowledge Exchange Division Manager Tanner Emhke tells Brownfield the dairy industry experienced unprecedented volatility in the last quarter.

“If current prices hold, then this is going to be great news for farmers, but it’s widely expected that dairy production is going to increase.”

He says cheese prices have almost gone vertical in the last month, April and May milk checks will be the lowest mailbox prices when accounting for additional COVID-19 deduction when accounting for the current milk pricing structure.

Supply chain backlogs at the pandemic shifted a lot of milk globally into powdered products which Emhke says is a long-term concern as COVID-19 continues to spread internationally.

Chicken producers and processors have been able to manage through disruptions and CoBank expects a three percent growth for the industry.