Robust U.S. economy, higher commodity prices in 2021, says USDA
A resurgent U.S. economy will grow at its fastest pace in two decades after this year’s coronavirus slowdown, helping to boost commodity prices almost across the board, said the USDA in its first projections for 2021. Growers will harvest a record-large crop of soybeans and the crop will sell for an average $10 a bushel for the first time in seven years, thanks to strong demand.
Inflation and interest rates will remain low in 2021 while U.S. gross domestic product rises at 4%, according to USDA’s macroeconomic assumptions for the year ahead. It would be the most rapid economic expansion since 4.13% in 2000. GDP usually runs at 2% to 3% a year. It fell 5.8% this year.
USDA economists projected a corn crop of 14.890 billion bushels, the second-largest on record, and a record-setting 4.465 billion bushels of soybeans, both up from this year. Wheat production would rise to 1.890 billion bushels as plantings rebound from a record low and Upland cotton would total 16.9 million bales weighing 480 pounds each. Corn, soybeans, wheat, and cotton are the four major U.S. field crops.
The USDA on Friday released its projections of macroeconomic conditions, and U.S. crop and livestock production and consumption, in the decade ahead. The material is part of the so-called long-term agricultural baseline, which will be released in full at the annual Agricultural Outlook Forum on Feb. 18-19.
At $10 a bushel, the season-average soybean price would be the highest since $10.10 in 2014/15. The USDA projected soybean exports at 2.175 billion bushels, as large as before the Sino-U.S. trade war. Corn would sell for an average $3.65 a bushel, also the highest in seven years. Stronger market prices also were forecast for wheat, cotton, rice, sorghum barley, cattle, hogs, and broiler chickens. Egg and milk prices were projected to decline modestly and oats to hold steady.
Corn and soybean plantings were projected to run at 89 to 90 million acres apiece in the decade ahead, with wheat around 45 to 46 million acres. The record for soybean plantings is 90.2 million acres in 2017.
USDA’s “early release tables” are available here.