Will Consumer Spending Steer Farm-Level Investments in 2021

DENVER, CO – The U.S. economy continues to outperform expectations as stimulus funds are fueling robust consumer spending. According to the new Quarterly report from CoBank’s Knowledge Exchange, consensus forecasts point to a 7 percent growth in the gross domestic product (GDP) for 2021, the fastest rate of expansion since 1984. Inflation, economists explain, is inevitable, as the 2020 price declines will widen year-over-year inflation over the next two quarters, and new upward price pressure should push headline inflation above 3 percent. The cyclical turn in grain pricing, driven by strong demand and tight stocks, continued during the first quarter of this year and has picked up further gains ahead of spring planting. Grain exports to China have been very strong helping to keep the backdrop for the grain and oilseed complex positive. A recent resurgence of African Swine Fever (ASF) in Asian countries could temporarily slow soybean demand. Financially strong U.S. crop farmers should increase spending given a 3 percent increase in planted corn, soybean, and wheat acres.
(SOURCE: All Ag News)