Today, a review of my top posts from the first quarter of 2021 and a quarterly macroeconomic and agriculture economy update.
Dates and Deadlines
4/5/2021 – Swisher/Hale Crops Conference
4/5/2021 – Reopening of CFAP 2
4/7/2021 – Lower Rolling Plains Ag Conference
4/9/2021 – WASDE
4/9/2021 – *New* QLA Application Deadline
4/13,15,20,22/2021 – Developing a Drought Management Plan for the Ranch Webinar Series
4/27-4/28 – Hemphill County Beef Conference
What I’m Reading
Four-part ranch drought management planning series set in April
Suez Canal Backlog Grows as Efforts Resume to Free Trapped Ship – Wall Street Journal
USDA will distribute $12 billion in COVID relief – FeedStuffs
Quarterly Economic Update
Agriculture
Commodity prices have been on a tear since the beginning of the quarter. Trade commitments from China drove prices of corn, sorghum, wheat, and cotton up through the fall of 2020 and into the beginning of 2021. December Corn is up 7.19%, July Wheat is up 2.57%, and December Cotton is up 4.85%. Those percentage increases mask much higher prices two to three weeks ago. Recent factors like technical selling, acreage prospects, and the situation in the Suez Canal are providing pressure to the crop complex, outweighing phenomenal (near record breaking) export bookings for corn and other crops in recent weeks.
Equities
Equities increased at a rapid clip over the first quarter of 2021. On January 1, 2021 the DJIA opened at 30,223, the NASDAQ opened at 12,698, and the S&P 500 opened at 3,700. As of Friday, the DJIA opened at 33,072 (+9.43%), the NASDAQ opened at 13,138 (+3.47%), and the S&P 500 opened at 3,974 (+7.41%).
While the NASDAQ did rise, it saw the lowest overall growth. The NASDAQ has a high concentration of tech companies, and so it is widely seen a measure of the technology sector. As more vaccinations are administered and more states reopen money is flowing out of the burgeoning tech sector and into ‘reopening’ stocks and commodities.
Macro Markets
The story for 2021 will be economic recovery. The rate and form of the recovery will depend on things like consumer spending, housing starts, and industrial growth. The $1.9 trillion stimulus package will pump money into consumer spending through stimulus checks. Of the $1.9 trillion $12 billion is marked for direct producer payments. Continued economic growth will likely be tied closely to statewide reopening efforts and consumer confidence. Expect these changes to also affect the price of inputs, particularly fuel, as consumers begin to travel more under less strict rules.
Top HPAW Posts from Q1
High Plains Ag Week 1/25/2021 – Review of LFP
My most viewed story of the first quarter was the Livestock Forage Program reminder. The Livestock Forage Program provides payments to forage producers in counties with qualifying losses. While I don’t necessarily consider it a risk management program per se, it is a great tool for mitigating losses from drought. While we’re still a long way from the program sign up deadline for the current year, many forages are already eligible for payments under LFP. You can find program details here.
High Plains Ag Week 1/18/2021 – District 1 AgriLife Budgets
The second most viewed High Plains Ag Week story during the first quarter was my review of the District 1 AgriLife Crop & Livestock Budgets. A lot has changed since I developed that budgets during the fall. Even though our crop complex has seen a price dip over the last two weeks, prices for corn, sorghum, wheat, and cotton are much higher than during the fall of 2020. As we move through planting season, you can review your budgeting plan using the Crop Profitability Analyzer.
High Plains Ag Week 3/1/2021 – Gain or Grain?
The third most viewed post of the quarter was my review of the Wheat Harvest Analyzer. The all important gain or grain decision was more straightforward this year than last. Wheat prices have seen pressure the last two weeks, but still remain elevated compared to 2020 and prior. There are good prices around for wheat hay and wheat silage this year as well.