FAPRI-MU Updates U.S. Agricultural Market Snapshot

Update reflects impacts to agricultural markets from recent global events.

The 2022 FAPRI-MU baseline outlook has been updated to include the large impacts on agricultural markets in the last three months, reflecting higher farm receipts and costs and higher consumer food prices.

Pat Westhoff

The initial outlook released in March was based on information available in January 2022. The partial update to the baseline is based on information available in mid-April 2022.

“The increases in U.S. crop and crop product exports because of the Ukraine war and reduced South American supply are based on tentative judgments, not detailed assessment,” said director Pat Westhoff of the University of Missouri Food and Agricultural Policy Research Institute (FAPRI-MU), pictured at left. “As this is a partial update relative to the full FAPRI baseline, we focus on only the next two years.”

Some of the findings from the recent analysis:

  • Projected prices for crops harvested in 2022 are much higher than the FAPRI baseline outlook. Corn prices exceed $6 per bushel, wheat is over $8 per bushel, and soybeans top $14 per bushel. Even these prices are below prices implied by futures markets in late April ‘22.
  • Livestock sector prices are boosted by lower ’22 production than previously expected and strong demand. Avian influenza reduces the number of laying hens and egg production.
  • Production expenses are also higher than previously projected. Higher costs for fertilizer and feed contribute to a $55 billion (14 percent) increase in farm production costs this year.
  • Projected net farm income in 2022 is almost the same as in ‘21. Growth in crop and livestock sector receipts offsets the increase in expenses and a drop in government payments.
  • Consumer food prices increased by 6.8 percent in 2022, well above previous estimates than even the 5.5 percent rate in 2008.

“The outlook for 2023 and beyond, based on the updated report, depends on the evolution of the war in Ukraine, the weather and a host of other factors,” said Westhoff.

Assuming a partial return to normal next year, FAPRI-MU projects lower prices for many commodities, lower net farm income, and slower food price inflation for 2023.

View the full U.S. Agricultural Market Snapshot, April 2022, online.