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Chief economist for USDA says volatility and risk management the story for 2022
The chief economist for the USDA says markets will be hyper-focused on every event that could impact corn and soybean crops this year.
Seth Meyer tells Brownfield global supplies are very tight. “It’s going to be sensitive to further changes in south American crops up or down,” he says. “The market is going to be really sensitive to how our planting progress goes. It’s going to be sensitive to how our crops develop simply because in a market as tight as we are, plus with some risk premium to those crop prices.”
He says producers need to consider risk management options. February was the price discovery month for crop insurance and Meyer says the prices could set some of the highest crop insurance prices over the last decade, and that’s good news for producers.
“Because what troubled me a little bit earlier in the year was folks laying out money for inputs and yet having a lot of the output that they hadn’t even, you know, the crop wasn’t even in the ground yet, let alone harvesting it,” he says. “They had been exposed to some price risk.” Meyer says if producers don’t have inputs priced yet, they’re likely increasing their risk for the 2022 crop.
Meyer made his remarks during an interview with Brownfield during the USDA’s recent Ag Outlook Forum.
AUDIO: Seth Meyer, USDA Chief Economist
