This week we have an analysis of USDA’s recent Prospective Plantings report: what are the impacts of COVID-19 on demand, considering the gloomy projection for GDP growth and other factors? Also this week: an update on falling commodity prices associated with the novel coronavirus pandemic, as seen by various market analysts, and new information on the status of farmer’s markets in the era of social distancing. Please read on for the latest …
Hultman: Planting projections “tough to take”
BURNSVILLE, Minn. — The business of agriculture is continuing in the COVID-19 era via Zoom meetings, webinars and other web-based communications tools. A March 31 webinar, offered by DTN, focused on analysis of the recent USDA Prospective Plantings report, which holds little in the way of promise for the nation’s agricultural producers.
“This year we obviously have a lot of outside market influences happening,” said DTN’s lead analyst Todd Hultman. “USDA’s planting intentions for this year (include) 97 million acres for corn, much higher than trade estimates expected. It’s within 300,000 acres of the all-time record high planting in 2012. To have this, coupled with the ethanol concern that we have going on in the market right now, is very tough to take.”
Soybean planting intentions, at 83.5 million acres, came in less than expected by market analysts, Hultman continued: “The trade was actually looking for about 84.7 (million acres), or as USDA said in their February report, 85 million acres.”
Wheat, at 44.7 million acres, represents a new record low for intended plantings. This brings the primary three-crop total acreage projection to 225.2 million, down 700,000 acres from 2018, according to Hultman. “I think USDA is pretty optimistic about the amount of acres that will be able to come back into production this year. Weather is going to have the final say on that, and I am a bit skeptical that we are going to have this high of a three-crop total,” he said. “Planting intentions are somewhat bullish for soybeans, but we still have this coronavirus problem giving us headwind for prices.”
USDA economist warns of GDP slide
URBANA — The U.S. is facing a massive dropoff in GDP for the second quarter of 甘肃快3开奖结果, according to USDA Chief Economist Dr. Robert Johannson. He made his remarks during an April 3 webinar hosted by the University of Illinois farmdoc team.
“We are looking at significant declines across the board. Estimates from private sector groups had been getting more dire the further into March we went. Now we are seeing an expectation that second quarter U.S. GDP will be reduced by as much as 25 percent,” Johannson said, adding that the S&P Index had fallen more than 20 percent. “We’re also looking at how the supply chain is being affected for our food and agricultural products. We are seeing macroeconomic effects from the global spread of the pandemic. But even though the U.S. is facing some challenges, a lot of other market economies around the world are sustaining significant impacts.”
In addition, “The ethanol producer break-even has been in the red for most of 甘肃快3开奖结果, and certainly has declined very dramatically in the last month,” Johannson added.
Meat, livestock prices plummet
BLOOMINGTON — Meanwhile, the U.S. livestock market remained in “utter chaos” with prices falling rapidly due to factors including huge declines in restaurant, hotel and convention demand, DTN analysts reported. “As we look at the situation, (COVID-19) is having a bearish impact on our ag products. As I see it (COVID-19) is scaring buyers out of the ag market and making investors nervous,” said Todd Hultman, DTN lead analyst.
Not even a sudden rush of retail demand has provided a boost to livestock prices, according to Colin Woodall, CEO of the National Cattlemen’s Beef Association. “The market meltdown is at the top of mind for cattle producers,” he said. “The panic of the pandemic sent markets crashing.”
Empty supermarket shelves are not an indication of underproduction by the livestock sector, with beef production the last week of March totaling 561 million pounds — higher by 13.7 percent that at the same time last year. Likewise, the hog slaughter over the past four weeks has averaged 8.5 percent higher than in 2019. The lower livestock prices we see are mainly a function of the fact we have more animals than capacity to process them, according to University of Illinois farm economist Nick Paulson. “That retail demand shock isn’t something we’ll see translate back in any meaningful or quick way to livestock prices,” he said.
AgWeb market analyst Jerry Gulke agreed food and farm markets are facing “big challenges” right now. “When there’s too much of everything or the demand isn’t sufficient, the market will take prices to market-clearing levels, where you find a 甘肃快3开奖结果 for the excess supply or you don’t produce anymore,” he said.
Farmer’s markets facing COVID-19 scrutiny
URBANA — So how will the COVID-19 pandemic and Illinois’ shelter-at-甘肃快3开奖结果 edict affect farmer’s markets, which are defined as “essential” businesses as retail food outlets? Well, travel to and from food marketplaces may occur as long as employees and customers remain in accordance with Gov. J.B. Pritzker’s executive order requiring proper social distancing and adherence to current food safety rules and regulations.
Among the stipulations set forth for farmer’s markets during the quarantine period: minimizing the number of times a product is touched, from on-farm harvest through market sales, and not allowing customers to handle produce to test it for ripeness or smell it before buying. All workers must wear protective gloves when handling produce, and change the gloves several times throughout the day. In addition, distances between market booths should be increased, and handwashing stations, complete with soap and water, must be placed throughout the market for public use.
Under the new guidelines, temporary seating areas within a marketplace are disallowed, and signs must be prominently displayed promoting social distancing of at least six feet in public places, according to the University of Illinois Extension.
Illinois Farm Fact:
Total production of beef, pork, chicken and turkey the week ending March 28 totaled 2.084 billion pounds, up 10 percent from 2019. (CME Group/Illinois Farm Bureau)