During election week, the markets are even more unpredictable than normal. So, what are some factors farmers should watch—no matter the outcome after Tuesday? University of Missouri economists provide this list.
- Renewable Fuel Policy
“We’ll see some renewable fuel policy for ethanol probably dropped between the election and inauguration, no matter what happens with the election,” says Seth Meyer, associate director of the University of Missouri’s Food and Agricultural Policy Research Institute (FAPRI). “We may even see some additional policy depending on how the election turns out.”
Meyer says while he thinks that’s the biggest immediate impact.
- Relations with China
“If we have the same or a different administration, watch how the Chinese respond to this, and whether that demand we’re seeing is a strong underlying demand or not. How the Chinese play it is probably a big deal, too,” he says.
University of Missouri extension professor, Scott Brown, also thinks China’s response to the election will be key, especially how it plays into exports in the coming months.
“I think it certainly can be a concern,” Brown says. “We hinge so much on one country. Take the pork markets in particular, we have just seen some pretty strong pork demand unfolding in 2020 related to China growth, as the China hog herd rebuilds. So, this is really beyond politics. I think it’s going to be hard for us to continue to see expansion in pork exports to China in 2021, yet saying that, it doesn’t take very much of a change in Chinese consumption or production, to mean large changes in exports to try to balance that market.”
- Short-Term Domestic Demand
Brown says demand at home could rely on what type of stimulus package is passed by Congress between now and the end of the year.
“We need to get a budget done for FY21, and that runs out in early December,” Brown says. “So, how does that happen? Once we get beyond the elections, I think it’s really important. And No. 2 is stimulus. Are we going to provide more stimulus in some fashion, either directly to agriculture, or indirectly through things like PPP? To me, trying to keep demand going in what is otherwise an economy that’s trying to slow down is really important.”
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