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The USDA anticipates a 12 months of average to sturdy development throughout many commodity sectors, with usually sturdy costs and excessive ranges of exports, whilst world situations stay unsure.
The 2022 Commodity Outlook studies, launched final week, centered on sugar, dairy, grain and oilseeds, livestock and poultry and cotton sectors, each within the US and globally. The outlooks have been introduced on the annual Agricultural Outlook Discussion board, and USDA chief economist Seth Meyer acknowledged they have been calculated previous to Russia’s invasion of Ukraine. Nonetheless, Meyer mentioned the earlier unrest between Ukraine and Russia had already elevated costs for wheat.
Meyer mentioned all commodity sectors might be depending on spring climate this 12 months, as there may be sturdy world demand for US merchandise and usually tight markets.
Whereas the outlooks differ based mostly on sector, all acknowledged the COVID-19 pandemic and the way it modified the market in 2020 and 2021. Specifically, the dairy and livestock sectors are nonetheless recovering from labor and logistics points over the previous two years and will discover the largest shifts all through 2022.
Cotton
World consumption of cotton is anticipated to remain sturdy this 12 months and exceed manufacturing, decreasing world shares barely. Costs are additionally anticipated to fall to 95 cents per pound, as costs stage off from final 12 months’s excessive.
Planted acreage throughout the US is up 13 %, and manufacturing is anticipated to extend throughout the nation, with famous will increase throughout Texas.
Dairy
It was a troublesome 12 months for the dairy trade in 2021, however regardless of the challenges, home consumption and manufacturing rose and industrial exports elevated by 8.3 %. This 12 months, slower development is anticipated, with a drop within the variety of dairy cows anticipated. The ratio of dairy heifers anticipated to calve this 12 months is the bottom it’s been since 2009.
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Producers are additionally anticipated to face excessive costs in feed, gas and freight, squeezing revenue margins. Home use and demand can be anticipated to gradual this 12 months, as grocery prices stay excessive.
Oilseeds and Grains
Planted space for corn, wheat and soybeans is anticipated to rise to its highest level since 2014. Sturdy wheat costs and a discount in US shares is forecasted to spice up wheat acreage to 48 million throughout the nation. Nonetheless, costs for all three crops are more likely to decline with the stronger provide out there. Corn grown for ethanol is up considerably to five.4 billion bushels, whereas its feed use stays unchanged from final 12 months. Exports are down amid expectations of elevated world competitors.
Planted space of rice is up barely, though the acreage in California will take longer to get better. There are nonetheless points throughout the state with sustaining the water provide wanted for irrigation. In the meantime, assuming good climate, soybean exports are anticipated to rise this 12 months.
Sugar
There might be a modest improve in cane sugar manufacturing, pending good spring climate, particularly within the Louisiana space. Crops for human consumption will even improve barely from 2021 ranges.
Livestock and Poultry
Labor points and delivery logistics continued to problem the sector in 2021, however beef and broiler manufacturing managed to rise within the face of the uncertainty. On the finish of final 12 months, a lot of the sector skilled excessive costs, with cattle seeing its highest charge since 2015.
This 12 months, provides of cattle and poultry are anticipated to say no, as demand is unsure. The outlook notes that, for a lot of households, disposable earnings is down. Nonetheless, as COVID-19 restrictions loosen in lots of elements of the nation, demand for meat typically rises.
Hog imports will drop 14 % from final 12 months. In 2021, imports rose as a labor dispute at a serious Canadian packer despatched extra hogs to the US. This 12 months, these numbers are anticipated to reset. Sheep and lamb manufacturing will decline barely this 12 months, the seventh consecutive 12 months the numbers have dropped.
Egg manufacturing will rise barely from final 12 months, as the costs have been unstable in 2021. World exports are anticipated to drop 10 %, as different markets, akin to South Korea, look to rebuild their flocks following the discovery of avian flu at a number of native farms.
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