CoBank’s look ahead at the ag economy

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CoBank’s look ahead at the ag economy

An ag economist says he’s optimistic about the overall recovery to the ag economy post-COVID.

But, Tanner Ehmke, manager of CoBank’s Knowledge Exchange, says it won’t be a home run for everyone in agriculture.  “We do see a weakening dollar, for instance, because of what’s going on with COVID,” he says.  “That’s going to be a positive for exports.  At the same time, when you have strong commodity prices that’s going to be raising costs on other end users.”

He tells Brownfield China will likely continue to play a large role in the profitability of the ag economy.  “Over in China they’ve had weather issues that have destroyed a lot of their crops,” he says.  “At the same time, they’ve had a recovery in the size of their hog herd.  This is causing a big spike in demand as they’re also trying to replenish state reserves for agricultural commodities and we see that continuing through much of 2021.”

Ehmke says higher commodity prices and lower interest rates will also play an important role in the farm economy as direct payments are expected to decline significantly in 2021.