Dr. Penson Feature
The economy grew at a 6.6 percent rate in the 2nd quarter in 2021 but is expected to slow to 3.4 percent in the 3rd quarter as the spread of the Delta variant of COVID-19 led to a slow down in consumer spending as well as continued supply constraints in both products and workers. The economy is expected to grow more robustly in the 4th quarter and average 4 percent in 2022. For agriculture, export demand is expected to reach a record level in 2021 and continue strong in 2022. The low stock carryover for major crop commodities and expanded demand should continue to support crop prices at current high levels. Continued strong cash receipts will be offset to some extent by substantially lower direct government payments and higher costs for fertilizer and chemicals. Net farm income is expected to be $100 billion in 2022, down from the USDA's forecasted $113 billion in 2021, but above the $94.6 billion recorded in 2020. Farmland values, which have remained remarkably stable in recent years, are in high demand as low-interest rates are likely to stay through 2022 and return rates on rural land ownership are strong.
Dr. John B. Penson, Jr., Chief Economist
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