Halfway through the year it has been a wild ride—so far

Dave Bergmeier

The celebration of Independence Day marks the mid-year point of 2021.

What we have learned yielded numerous surprises and also leaves much ahead for the remainder of year. Farmers and ranchers have long heeded the advice of their management team—their spouse, children, accountant and banker—as they put down their written plans at the beginning of the year. Just as financial advisers tell their clients, a well-written plan also has to leave room for adjustments.

As 2021 began it included a new administration with new players in all positions that impact farmers and ranchers and rural communities. Also, key committee positions in Congress changed. Many knowns and unknowns from the Biden administration remain in the discussion stage, although farmers and ranchers are wary of new regulations from water to climate that might impact their long-term bottom line.

One unexpected certainty was that China continues to be major buyer for United States commodities. Corn, wheat, soybeans and sorghum are all up from the beginning from the year, although wheat prices have returned to the level as 2021 opened.

Plus a major dose of uncertainty from Mother Nature has left many in the agriculture industry wondering what could be next. No one has been spared of Mother Nature’s whims. Drought conditions and heat remain persistently high in places not accustomed to it, including the Dakotas, Montana, Wyoming, western Colorado and New Mexico and far western Texas. Drought also lingers in Minnesota, Iowa and portions of Nebraska. No state has been spared of record heat that was ushered in mid-June. The agricultural sector in California has also been nerve-wracking.

The heat rolled up corn leaves in less than a week and yet a belt through the mid-section also had a record rains in late June.

Many veteran observers would rightfully say, “This is nothing new.” Still, the swing in weather variables is likely to stay in place as much of the High Plains turns to the drier part of the season and waits for timely rains to finish up spring planted crops.

The livestock industry has also been in the news. Concerns over the speed of lines to process pork could mean a 2.5% reduction in harvest capacity at six major plants as a federal district court struck down a 2019 provision of the U.S. Department of Agriculture’s New Swine Inspection System. The National Pork Producers Association is asking the Biden administration to help.

Beef has also been at the top of Congress’ agenda as in recent months lawmakers from both sides have pressed for answers to try to ensure that more profits are shared equitably with producers and also benefit consumers.

A recent Senate hearing provided an opportunity for key players and organizations, many of which have divergent views, to agree the industry needs to make sure it is balanced.

Inflationary pressures, whether for fuel or fertilizer, are likely going to press farmers and ranchers to watch for opportunities to hedge and manage their bottom lines.

Our best guess is the remainder of 2021 will continue to have a similar theme and likely carry into 2022. Unpredictability remains a constant.

Dave Bergmeier can be reached at 620-227-1822 or [email protected].