USDA: Farm economy was bad before pandemic and remains uncertain for 2021

American farmers were battered by economic headwinds before the COVID-19 pandemic ripped apart traditional supply chains – and the farm economy could drop even lower in 2021, according to a grim new report from the chief economist at the U.S. Department of Agriculture.

The analysis posted last week by Robert Johansson, pointed out that commodity prices were low before the pandemic started and caused “immediate and severe” consequences for farm families.

Johansson says things have improved in recent months, but that the agricultural sector remains out of whack. For example, he pointed out, U.S. consumers in August were paying 5% more for a pound of beef, while beef producers that same month were getting 20% less for their cattle.

Johansson did not mention hemp commodity prices, though farmers informally report that wholesale biomass prices took a sharp nosedive this year, even as American consumers bought more hemp products such as CBD.

The economist did project rising agricultural exports in 2021 and strong demand. But he cited a University of Missouri forecast that projected U.S. farm income will drop $21.9 billion in 2021 compared to its forecast prior to COVID-19.

He concluded on an uncertain note.

“It’s hard to tell whether the tough times are over for farmers or more still lie ahead,” he wrote.