Do black swans still count as black swans if there is an entire flock of them? That’s been the question for this dynamic year in agriculture. What were the economic topics that drew the most attention in 2021? What are some of the challenges we foresee in the upcoming year? Today, Pancho and I wrap the blog for 2021. We’ll also take a brief look and upcoming AgriLife resources and programs to look out for in the new year.
Dates and Deadlines
12/14/2021 – Canyon Estate Planning Meeting
1/12/2022 – Top of Texas Cotton Conference, Pampa
1/18/2022 – Pioneer Producer’s Meeting, Panhandle
1/19/2022 – Pioneer Producer’s Meeting, Hereford
1/20/2022 – Pioneer Producer’s Meeting, Muleshoe
1/21/2022 – Pioneer Producer’s Meeting, Plainview
1/13, 1/24, 2/23, 3/9/2022 – North Region Production Education Online
1/19 – 1/20/2022 – Red River Crops Conference
1/26 – Organic Cotton and Peanut Production Seminar. Seminole, Tx.
1/27 – Rolling Plains Chemical Conference. Dickens, Tx.
1/25, 1/26, 1/27, 2/9, 2/10, 2/23, 2/24, 3/9, 3/10/2021 – Amarillo Master Marketer, Amarillo
1/28/2022 – High Plains Cotton Conference, Spearman
1/31/2022 – Livestock Forage Program Application Deadline
2/1-2/3/2022 – National Cattleman’s Beef Association National Meeting, Houston
What We’re Reading
Master Marketer program helps farmers, ranchers reduce risk, increase profits – AgriLife Today
House passes 2 NCBA-backed bills on market transparency – Morning Ag Clips
Supply chain bottlenecks hitting all sectors, including ag – Feedstuffs
COTTON SPIN: Black swans and turkeys – Southwest FarmPress
AgriLife Extension’s North Region offers production education online – AgriLife Today
Inflation Isn’t ‘Transitory’ on My Farm – The Wall Street Journal
Retreat From Globalization Adds to Inflation Risks – The Wall Street Journal
Top Posts of 2021
First, let’s take a look at the top four posts by view count for 2021.
High Plains Ag Week 4/12/2021 – Costs from Hemp Final Rule
The continued interest in hemp production has continued to surprise me. Despite continued pressure on prices from an oversupply in CBD, our review of hemp production costs listed in USDA’s Final rule had the most traffic of any post this year. There is still plenty to learn about hemp production here on the Texas High Plains, but a new fiber processing facility near Lubbock makes hemp production for fiber the most interesting market in my mind. Under the right circumstances, hemp production for fiber may be a viable part of a crop portfolio, though I truly believe the days of overnight millionaires in this market are over.
High Plains Ag Week 9/27/2021 – Review of 75% Plan Q3
In July 2020, NCBA committed to the 75% Plan, designed to encourage increased negotiated trade in the fed cattle sector. Concerns surrounding price discovery, low cattle prices across the board, and the disruptions from the COVID-19 pandemic coalesced to bring NCBA to establish the measure. Each quarter I review industry performance and the state of negotiated trade. At the moment, negotiated trade volumes in Q4 are the highest all year.
High Plains Ag Week 3/15/2021 – A Year in Ag Since Lockdown
We’ve been living with COVID-19 for 21 months. At the time of this post, we’d been under some form of restrictions or lockdown for a year. On March 15th, I reviewed the changes in agriculture after a year of coronavirus.
High Plains Ag Week 9/6/2021 – Livestock Risk Protection, Plus Pancho Abello Joins the Blog
I was really excited to add a co-author to the blog this year. Pancho Abello, the Texas A&M AgriLife Management Economist for District 3 has been writing for the blog for about three months now and his expertise has added a lot. In his first post, Pancho discussed the use and outcomes of the Livestock Risk Protection Program.
2022 – Upcoming Issues and AgriLife Resources
In my conversations around the state, plenty of long-tenured producers has agreed that 2020 and 2021 have been some of the most challenging years in memory. Hopefully, the black swans have all gone home, but at the moment, 2022 is promising to present another dynamic year in agriculture. We’re watching plenty of upcoming economic issues, but those ranking near the top include:
Input prices/Supply Chain Woes
We’ve all been forced to learn a bit more about the pre and post farm gate supply chains over the last 365 days. Fertilizer prices are up well over 50% and in many cases, prices have more than doubled. Chemical costs spiked year over year too, with many critical chemicals doubling in price over the last 12 months. Add to that the rising cost of fuel, the potential for higher interest rates, and increased feed costs for livestock producers, and we’re talking about a squeeze in 2022. In January we’ll publish the new Texas A&M AgriLife Budgets online, the updated Crop Profitability Analyzer, and physical copies of District 1 Texas A&M AgriLife Budgets to help mull over your input decisions.
Looking to a new Farm Bill/Farm Policy
The time is coming to reopen the farm bill. Reauthorizing ARC and PLC and developing concrete disaster relief programs have been thrown around as important topics to address in the upcoming discussions. In addition to these standard talks, carbon sequestration and lowering carbon emissions are sure to make an appearance in the debates, if not in the final bill. With a likely turnover in the U.S. House of Representatives and a resulting split federal government, what are the prospects for agricultural policy?
Negotiated Trade/Cattle Industry Market Power
We’ve already mentioned this topic once, and it is likely to remain important through 2022. The new Fischer-Grassley bill introduced in the Senate will at least keep this conversation alive. Continued concerns over cattle packing sector profits and suspicions of market manipulation have died down some since the summer, but there are still plenty that wants to see some kind of action. Whether that action comes in the form of mandated negotiated trade volumes or takes some other shape is the big question. In the meantime, you can read up on the fed cattle market in the Texas A&M Agricultural & Food Policy Center book, “The U.S. Beef Supply Chain: Issues and Challenges“.
Market Volatility
The Early-December 2021 CPC/IRI Official Probabilistic ENSO Forecast has increased the likelihood of having a Niña during this winter season until approximate March. The La Niña event will likely exacerbate drought conditions in most winter wheat areas in the US. It is also correlated with higher chances of a drought in Argentina and some areas of Brazil, which can decrease corn production in that area, supporting prices for feed grains. If drought conditions persist, we might see more volatility in the market.
Thank you for reading along this year. If you have any questions between now and the beginning of the year, or if you’d like for us to write about a topic you haven’t seen, please reach out to me at benavidezjustin@tamu.edu or to Pancho at pancho.abello@ag.tamu.edu.