U.S. Agriculture Faces Several Challenges
Many issues are likely to impact agriculture this year.
Compiled by staff
Published: Jan 6, 2011
Fertilizer prices, trade issues, weather, global politics, and the U.S. economy are all expected to be the major factors to affect U.S. livestock and meat markets in 2011. Economists Steve Meyer and Len Steiner say fertilizer prices will be a key in this spring's battle for acres and, as they did in 2008, have some impact on the carrying capacity of southern pastures that are fertilized as a common practice. They expect the big impact will be on expected returns over cash costs for corn, cotton and, to a lesser degree, wheat producers.
If Congress moves on trade pacts, then trade issues for the livestock industry will come into play and weather can become an issue as well. The entire situation with grain supplies and demands leaves U.S. agriculture at perhaps its most vulnerable position in years regarding weather. Dr. Elwyn Taylor at Iowa State points out that, based on 800 years' worth of tree-ring data, the longest period between droughts in what is now Iowa has been 23 years. Taylor says if we get through this year without a drought, we will be in new territory and bucking 800 years of history.
The Korean peninsula, the Middle East, Iraq and Afghanistan are areas to watch for explosions in global politics. At risk, as in most conflicts, is the U.S. oil supply. And finally there are the rules of the game in the U.S. economy. Health care and financial regulation will have an impact. However, just what those huge new initiatives mean for what firms can and cannot do and the costs of doing or not doing them is still unknown and that uncertainty is causing hesitation and slowing the economic recovery.
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Tagged: fertilizer, fertilizer prices, wheat, cotton, Drought
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