New Year and New Administration Contributes to Optimism

DENVER, CO – According to a CoBank Knowledge Exchange Division Quarterly Update, 2021 has quickly altered the political and market landscape and optimism, particularly about the second half of the year, is rising. For now, the pandemic is still very much impacting the U.S. economy and rural industries. The promise of vaccines to treat COVID-19 and dramatic improvement in commodity prices is enabling markets to look over the horizon to better days ahead. The shakeup in political power in Washington has boosted confidence that more fiscal spending is on its way, steepening the yield curve and rising GDP forecasts. In the meantime, grain-related industries are riding a wave of commodity price increases and profitability not seen in years. Corn and soybean prices have climbed more than 60 percent since August, turning margins for many from red to black. The reverse is true, however, for those in animal protein, dairy, and biofuels as they struggle with the sudden increase in cost. Among infrastructure industries, the power sector continues to grapple with the transition away from coal, but a mild winter has moderated natural gas prices, limiting cost pressure on some generators for now. Finally, new action by the Environmental Protection Agency (EPA) will speed replacement of lead pipes in the water supply, and communications providers continue to benefit from the high demand for better broadband.
(SOURCE: All Ag News)