Ag outlook brightens, but ‘a little murkier’ long-term
The increase in commodity prices has brightened agriculture’s economic outlook heading into 2021.
But Jackson Takach, chief economist for the Federal Agricultural Mortgage Corporation (Farmer Mac), warns that the ag economy is not out of the woods yet.
“When you look at the root causes of the commodity price improvements, they tend to be a little bit temporary. The export demand is really coming from supply-side issues and lower prices on our part,” Takach says. “So how much can we count on that moving into 2021? That will be sort of a question mark.”
Takach says 2021 should start strong, “but from there, things get a little murkier. So we’ll see what happens with the trade policies. A new administration might be advantageous to trade policy, as well as a weaker dollar.”
Takach says the other big factor is the coronavirus and its overall impact on the economy.