Market headlines impacting farmers’ bottom lines this year ranged from weather and war to exports and more. At the onset, 2023 appears to bring similar headwinds.
The folks at Successful Farming outlined five key factors that are likely to shape the market in the new year:
1. The war in Ukraine
Ukraine’s production has been significantly impacted by the ongoing Russian invasion. Current projections for the 2023 wheat crop are down more than 50% and corn by as much as 75%.
2. South American crops (and weather)
Harvest in Brazil and Argentina always draws eyes as leading competitors to U.S. soybean production. Brazil’s soybean acreage has gone up 40% in the last decade. With normal weather conditions, they can produce as much as 5.8 billion bushels – 33% more than the U.S. soybean crop.
3. Imports to China
While Chinese imports of U.S. agricultural products, namely soybeans, have risen in the last three years, corn imports are 26% down in 2022. It is uncertain why China has imported less, though political tensions have continued to impact the market.
4. The U.S. Dollar and global economy
While the Fed has continued to hike up interest rates in an attempt to offset inflation, if rates keep climbing, it could take a big toll on U.S. meat and grain exports.
The U.S. drought monitor has had seldom to share that brings relief among the most drought-stricken portions of the country this year. If dry conditions continue to plague the Western Plains and even parts of the Corn Belt, subsoil moisture reserves won’t last. Not only that, but Mississippi River barge traffic desperately needs precipitation to keep exports moving down to the Gulf.
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