Seth Meyer, USDA chief economist, opened the 2023 Ag Outlook Forum on Thursday-one year after Russia’s invasion of Ukraine. While aftershocks from COVID-19 and the war in Ukraine injected “tremendous” uncertainty into global ag markets, Meyer is hopeful 2023 will not look the same.
“Crop and livestock prices are still strong despite declining from recent highs and the farm sector, as a whole, enters the new year in good financial health with a strong cash position and solid balance sheet following a year of record-high net cash farm income in 2022,” Meyer says.
However, drought, input costs and unusual weather patterns continue to put a damper in USDA projections. And weather, according to Meyer, always has the final say.
At peak drought in 2021, around 65% of the country was in drought conditions. As of Nov. 2022, nearly 63% of the U.S. was experiencing drought conditions. And USDA isn’t convinced the pattern will begin a change to neutral quick enough to make an impact in 2023.
“The ongoing drought in the western U.S. has further drifted into cattle and wheat areas and there appears to be no immediate scope for significant improvement,” Meyer says.