Consiglio: Each year, the MU Food and Agricultural Policy Research Institute, or FAPRI, provides an economic outlook report of the food and agriculture industries to help inform farmers, consumers and policy makers. MU’s Pat Westhoff, the director of FAPRI, explained that markets are changing all the time in response to a variety of global factors, such as the war in Ukraine and drought in South America, as well as national current events, such as the avian influenza outbreak.
Westhoff: “This year of course the war in Ukraine has disrupted global markets for everything, that has made the markets for wheat and other grains much tighter than they were before, driving up prices for those commodities. The South American crop of soybeans is much smaller than anticipated previously, so that has really tightened up the markets for soybeans around the world, and likewise the higher oil prices have big ramifications for production costs and transportation costs.”
Consiglio: Westhoff also said while the projected net income for farmers may stay roughly the same for most farmers this year compared to last year, even a relatively modest change in the prices of commodities moving forward could have an impact of farmers’ net income one way or the other.
Westhoff: “We can say with high confidence that farmers will get a lot more gross income this year from what they sell because of higher prices, but we also know for sure they will spend a lot more on inputs this year, and so the question is the balance of those two things. We do hope we provide a balanced, objective view of the future for producers and everybody else in the sector, and maybe even more importantly, provide information to policy makers so they know the consequences of what they do, so if they make a change in policy what is that likely to do to farmers, to taxpayers and consumers.”
Consiglio: For more on FAPRI’s economic outlook report, visit showme.missouri.edu. I’m Brian Consiglio, with a spotlight on Mizzou.