Lingering issues from the last two years will remain in 2022, but American Farm Bureau Federation (AFBF) Chief Economist Roger Cryan said the good news is commodity prices are projected higher.
“Prices are looking pretty good for many of the benchmark crops and animal products. So, despite higher prices for fertilizers and chemicals and other inputs, farmers’ market returns should be higher in 2022,” Cryan said.
Beyond input prices, Cryan says there are other things to watch this year.
“Inflation is a big concern, and we’re hoping that the Federal Reserve Bank will follow through on their promises to rein that in,” he said. “Geopolitics keeps batting around our trade relationships, including things like sanctions blocking Belarusian fertilizer supplies, Chinese food and feed purchases, and the Chinese fertilizer export ban. We also see labor as a continuing issue for the farm economy in 2022.”
Several programs were implemented to provide farmers and ranchers with direct payments to provide relief from losses related to the COVID-19 pandemic.
“Farmers received very large government payments in connection with COVID in 2020 and 2021, and we don’t expect to see that to continue in 2022,” he said.
Cryan noted some issues from 2021 will linger this year, including moving agricultural products, both imports and exports.
About 25% of all U.S. farm products are exported each year, according to AFBF. And cancelled vessel bookings, shipping container shortages, bottlenecks of cargo ships at U.S. ports and other ocean shipping problems have agriculture feeling the brunt of ocean freight infrastructure shortfalls.
“We hope that the port problems can clear up some, at least for agricultural exports,” Cryan said. “If more containers are built and made available for U.S. exporters, it’ll be easier to get those containers filled up here in the U.S. for the trip back across the Pacific, instead of going back empty. But a lot of supply chain issues will continue well into 2022.”