FAPRI Releases its U.S. Baseline Outlook Report

The University of Missouri’s Food and Agricultural Policy Research Institute released its annual U.S. Baseline Outlook Report. Patrick Westhoff, FAPRI director, says while farmers are getting more for what they produce, input costs are also higher.

“In 2022, farmers are paying more for the inputs they buy and getting more for the commodities that they sell. As we look ahead, there are going to be a lot of changes in the years to come, some of which we can predict, some of which we can’t. The FAPRI Baseline Outlook has just been updated in the month of August 2022. Based on current market expectations and our models of agricultural commodity markets, prices are up for most major crops and livestock products as well. But at the same time, farmers are paying more for fertilizer, seed fuel, and any variety of other farm inputs.”

He says as they try to predict what might be coming in the months ahead, there are a lot of factors to balance.

“As we try to look ahead, we’re trying to balance all these different considerations of what might happen in global markets. The war in Ukraine has contributed to higher prices, as has the effect of unfavorable weather in South America for the crops harvested earlier this year and for the crops harvested this summer in Europe and the United States. As we look ahead, if we were to have more normal weather in the years ahead, and if the war in Ukraine eventually comes to a close, we could see some downward pressure on commodity prices.”

The new marketing year will likely see the highest commodity prices in the years ahead.

“We expect that prices received in the 2022-2023 marketing year, the year we’re just starting now, will be the highest in our projection for the next five years for all the major crops. The one exception to this rule is cattle, where we do expect to see higher cattle prices for the next several years. One reason is basic biology. Because of the drought that we’ve been experiencing in many producing regions, higher production costs, etc., we’ve seen a drop in cattle numbers that will translate into U.S. beef production in 2023 and beyond and should put upward pressure on beef prices.”

For a complete rundown of the report, go to fapri.missouri.edu.