2020 recovery will take a while

Share on facebook
Share on twitter
Share on linkedin

By David Strecker, SJFB President

This past year forced us to go back to the basics. Trips to the store found us buying the things we needed most. Instead of a night out at your favorite restaurant maybe you tried one of your grandmother’s recipes that you never had the courage nor the time to make. 2020 tried our patience and we enter this new year wondering where the ag economy is headed.

In order to see how the New Year will be, let’s looks at the basics. San Joaquin County, as well as the whole state of California, is very diverse in the ag products we produce. Wheat production in 2020 saw the lowest acreage totals in 100 years. With many of the worlds producers holding onto their supplies, the current price for 2021 is the highest it has been in several years. Even with an average harvest this coming summer, wheat has the potential to be profitable.

In mid summer 2020, the projected corn harvest was calling for recorded yields. Then on Aug. 10 and 11, the Great Derecho storm hit Iowa and much of the surrounding areas. Grain elevators with the 2019 crop were leveled, fields were flattened and record harvest turned into record insurance claims. Many corn producing areas outside of the path of the Derecho found themselves in drought. 2021 starts with low supplies and high demand for corn worldwide. Much of the same can be said for the soybeans grown throughout the Midwest.

When looking at the beef and dairy industry, much of the second quarter was full of logistical problems of getting product directly to the consumers. Production of milk for the restaurant and hotel industry is drastically different than the products consumers find in the grocery store. The meat industry also struggled with getting its product to consumers when many of the packers were forced to shutdown for periods of time while dealing with COVID-19.

With a vaccine now in place, hopefully confidence will grow with consumers around the world. If the “basics” are in demand, many of the specialty crops will hopefully be able to rebound as well. If Japan is confident with importing products once again, it will be good for the cherry growers. If restaurants are able to open back up, wine connoisseurs will once again be dining at the favorite venues with their favorite glass of wine from San Joaquin County. China has a lot of consumers and a lot demand for products it can’t produce.

2020 saw net farm revenue of $120 billion. Between $49 and $51 billion of that was paid with government payments directly to the farmer. 2021 will be much better if there is high demand for our products and the consumers can pay for the products they desire and the Government does not have to bail us out.

2020 was a very trying year. It is a long road ahead and the things I talk about above will not come easily or quickly. It will take most if not the entire year to recover from all that happened this past year. It is essential that government works for us and not against us.

I hope this new year finds you and your family healthy. Please be safe in all that you do and keep doing what you do best. Farm On!