Outlook on 2010: Bullish But Cautious


Various crop, animal ag, legislative and financial outlooks at the 2010 AFBF Annual Meeting can be summed up as optimistic but cautious.

Members had several conferences over the three day meeting, all of which provided outlooks on 2010. Crops, livestock and even legislative and regulatory forecasts were given to members to help them plan for the coming year.

Crops

Speaking to members at a crop outlook seminar, American Farm Bureau Federation economic analyst Terry Francl told members that A potential federal boost to the ethanol market, South American forecasts, reduced global cotton output and an international outpouring of “wheat, wheat, wheat” will influence U.S. farm fortunes this season.

“We’ll probably see corn acreage expand around the 90 million-acre level, up a little over 3 million acres from this past year,” Francl said. “Soybeans will probably hold. The big decline will be in the wheat area, down around 3 to 4 million acres, but we may pick up a million acres in cotton.

“The other thing is, we’ve got about 2 million acres coming out of the Conservation Reserve Program. So we may pick up another 200,000 acres to 300,000 acres in corn and soybeans, maybe a little in the wheat, but that’s about it,” Francl continued.

Livestock

Livestock markets are also looking up according to John Anderson, an Extension livestock economist with Mississippi State University.

“The livestock market in 2009 was pretty tough, but there are good reasons to be optimistic in where these markets are headed as we move through 2010,” Anderson said in a seminar today at the meeting.

In addition to improving prices, livestock producers should see improvements in profit margins in 2010.

Anderson told members that this year should be one of the best in several years for livestock producers, but it will hinge on healthy demand driven by a recovering economy.

Legislative

U.S. Rep. Charlie Stenholm (D-Texas), who served on the House Agriculture Committee throughout his 26 year career took members through his views of the coming legislative year.

While Setnholm called for action in health care reform, his appeal differed from Congress and the Obama Administration’s wish list for the measure.

“If we’re going to avoid a national calamity, something must be done. Period,” he said.

But Congress has failed to tackle the real health care issue-restraining costs.

“We absolutely need tort reform, malpractice reform,” Stenholm said.

According to Stenholm, an energy policy that addresses both fossil and bio-fuels is needed.

“We’re not going to replace oil and gas in the next 30 years, no matter how much we want to. We don’t have the technology to do it,” he said. “And we can’t produce food without fossil fuels. Doesn’t it make sense to develop that resource?”

Energy policy, according to Stenholm, must be market oriented or else it will not be sustainable.

Finance

Financial markets were also given a forecast by a nationally known expert.

Peter Ricchiuti, assistant dean of Tulane University’s A.B. Freeman School of Business and the founder of Tulane’s highly acclaimed Burkenroad Reports stock research program, said the recession ended last July, but patience is needed for a full economic turnaround.

“Recessions always end and the economy always rises to a higher plateau,” Ricchiuti said at a seminar at the 91st annual meeting of the American Farm Bureau Federation. “It’s not the time to give up. You can see the beach in this.”

A major cause for optimism is that there are trillions of dollars waiting on the sidelines to be invested, Ricchiuti said.

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One response to this post.

  1. […] story is an interesting take on ‘corporate’ rural america and reflects other projections that the ag economy is well positioned well to begin exiting the recession at or above the speed of […]

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