Farm Journal experts share their perspectives for the year ahead
As the roller-coaster ride of 2011 makes its final plunge, it’s likely that 2012 will bring the same gut-wrenching twists and turns.
"The global macroeconomics have been—and will continue to be—the dominant force influencing
commodity prices, inputs, global demand and virtually everything," says Farm Journal Economist Bob Utterback. "I expect that to continue for the next three to five years."
In 2012, there’s potential for 2 million corn acres. "If we have trend-line yield and a global economy that remains lackluster, we could end up with a 2.1 billion to 2.3 billion bushel corn carryover," Utterback says. "The last time we saw that carryover level, there was a 3 in front of corn prices."
On the policy front, the supercommittee’s failure to agree on a plan to reduce debt by $1.2 trillion during the next 10 years brings uncertainty to the Beltway. One thing is for sure: "Drafting a farm bill will revert back to a "normal" process, which will bring more scrutiny of what has already been accomplished by the House and Senate ag committee chairs," says Roger Bernard, Farm Journal’s Washington editor.
Across-the-board cuts are still possible to the tune of $15 billion for a nine-year period (which is less than the $23 billion that the House and Senate ag committee leaders proposed to the supercommittee), he adds.
Since 2012 is a year divisible by four, presidential politics will be on the rise. Republicans will be throwing sharp elbows at each other to determine who will face President Barack Obama in November. Some think the election could impact the farm bill process, but 2008 included both, so it can be done, Bernard says.
For now, the political watchers expect the GOP to lose five to 10 seats in the House but still retain control. Republicans are favored to gain control of the Senate, but they have only 10 seats to defend versus 23 for the Democrats.
Closer to home, the MF Global fiasco caused a large amount of fear in farmers about the safety of their money. "Couple that with the European situation and farmers are retracting accounts and putting money under their mattresses," Utterback says.
While many of these issues likely seem far beyond your control, you can still be prepared for the maybes and the maybe-nots. To help you get ready for the ride, we asked our Farm Journal experts to share their advice for the year ahead.
Here’s to a happy new year!
- December 2011