By Katie Nichols
Alabama farmers faced a myriad of challenges in 2020. Through a global health crisis and devastating natural disasters, producers pushed forward to harvest season.
Alabama Cooperative Extension System Economist Wendiam Sawadgo said despite challenges, agricultural markets ebbed and flowed — as is customary. COVID-19 left a lasting impact on market prices. However, markets received an added boost from China trade agreements.
“Producers will find commodities selling for prices similar to prices last year, thanks in part to exports to China,” Sawadgo said. “Yield projections for corn, cotton, soybeans and peanuts are up from 2019 in Alabama. This is in line with the yield increases we expect to see nationally for corn and soybeans.”
Continuing exports to China may impact market prices. Sawadgo said this is something to watch closely in 2021.
Corn And Soybeans
Sawadgo said corn production was up slightly in 2020. However, since the 2019 ending corn supply was lower than originally thought and the corn stock continues to decline bolstered by exports to China, 2020 corn prices rose to $4.20 per bushel, up from summertime projections of $3.20 per bushel.
Soybean exports are the highest in a decade. The stock-to-use ratio for soybeans was up from 2018 to 2019, driving prices lower as supply was high relative to demand. In 2020, however, stock-to-use ratios decreased, driving prices higher because of increased exports.
Soybean projections lingered near $8.20 per bushel in July, climbing to $9.80 in October. Sales to China are increasing as a result of trade agreements, with prices near $11 per bushel.
Cotton And Peanuts
Factory closings during the pandemic weighed heavily on the cotton industry, but prices rebounded from a 20-cent drop and settled near 70 cents per pound.
“There was a lot of volatility in the cotton market in 2020,” Sawadgo said. “Early in 2020, prices were low due to low demand and supply chain disruptions.”
Peanut yields were up in 2020. While markets were slower, prices remained similar to those in previous years.
“Cotton has recovered compared to early 2020. It might be hard for prices to rise too much, given the high world supply of cotton and lowered demand,” Sawadgo said. “The story is the same for peanuts, where prices are likely to be similar to the past few years.”
He said producers can expect corn prices near $4 per bushel. A significant increase from past soybean prices may be on the horizon. Sawadgo said projections surpassed $10 per bushel for the 2021 crop.
“This crop is in really good shape due to high demand, and prices are currently near four-year highs,” he said. “Farmers might plant more soybeans because of higher prices.”
Sawadgo said there are other significant agricultural economic influences to consider. Macroeconomic recovery from COVID, trade and policy will all majorly impact the economy going forward. Worldwide economic recessions could hamper expectations, as other countries may not purchase as many products. Sawadgo said producers could continue to see high prices if strong exports continue.