While 2020 is nearly in the books, farmers are looking ahead to 2021 with the same outlook of uncertainty they had this year following the coronavirus outbreak in March.
There’s uncertainty regarding COVID-19 and a risk of not knowing if there will be another nationwide shutdown that could lead to more market disruptions like the ones that impacted Florida farmer Sam Accursio this year.
There’s uncertainty regarding trade with China and the tariffs that are currently imposed on Chinese products that have prevented the country from purchasing U.S. pecans. This has led to extreme low prices this year for Southeast farmers.
There are various risks producers have to consider when planning for next year, says Adam Rabinowitz, Assistant Professor and Extension Economist at Auburn University.
“There clearly are a lot of uncertainties as we move forward into 2021. 2020 was a very challenging year as everybody knows from a lot of different standpoints with things that we have experienced that we have not felt before in agriculture as well. That just adds to the uncertainty moving forward,” Rabinowitz said.
“We still have a pandemic, as we see now cases rising and what impact that will have. We saw supply chain disruptions that occurred at the beginning of the year.
“We’ve seen net farm income continue to drop with the exception of government payments that have helped really to sustain it. There have been two rounds of the Coronavirus Food Assistance Program (CFAP) that have helped really alleviate some of the market issues.”
CFAP 2 Deadline
Producers have until Dec. 11 to submit their CFAP 2 applications. The program is open to growers of specialty crops, including fruits, vegetables, tree nuts, honey, horticulture and maple sap.
The uncertainty is magnified in 2021 because the country will transition from the Trump Administration to the Biden administration. What is the future of trade negotiations and the tariffs that are currently on Chinese goods?
“We do know that we have the trade negotiations that are still ongoing, regardless of who is in the White House. That’s still going to be an ongoing process,” Rabinowitz said.
“There are still the tariffs that the U.S. has put on Chinese products and other products with other countries in retaliation that has occurred likewise for U.S. exports going overseas. What happens to that is still an unknown. We’ve certainly seen China increase their purchasing of U.S. agricultural products this year, including getting into markets they have not been in before. That’s certainly promising.
“This Phase One agreement that we’re under right now with China where we essentially laid out a two-year plan, so what is the future beyond that and will they still be able to meet the first year goals plus an increase in second year goals? It’s still up in the air.”