Farming and Ranching: A Year of Volatile Commodity Prices and Near-Record Stimulus Payments.

• Author: Haynes, George
• Position: ASSESSING MONTANA'S KEY INDUSTRIES

Montana farmers and ranchers were met with a combination of international trade issues and severe impacts from the COVID-19 pandemic in 2020. While facing lower agricultural prices earlier in 2020, federal stimulus programs addressing international trade disruptions (Market Facilitation Program) and the pandemic (Coronavirus Food Assistance Program) played an important role in the profitability of Montana producers (Figure l).

Crop Production and Prices

Crop production returned to more long-run average production levels, although prices were very volatile in 2020. Spring wheat production increased by 23%, winter wheat production decreased by 20%, and barley and alfalfa hay production increased by less than 2%.

Total pulse acres decreased by 42% from a high of 1.5 million acres in 2017 to less than 900 thousand acres in 2020 for all pulse crops, except lentils. Lentil production increased by 42%, dry edible pea production trended downward by 20% and chickpea production declined by 49%.

When comparing commodity prices between 2019 and 2020, spring and winter wheat prices trended downward through September, but rebounded through the end of the year and increased by at least 7% over the previous year by mid-November. Barley prices remained steady. Lentil prices trended upward, while dry peas and chickpeas prices declined slightly. Hay prices remained stable to slightly lower than the previous year. Price forecasts for the next five years suggest steady prices in the wheat, barley, pulse and hay markets.

Livestock (Cattle) Production and Prices

Even with the challenges posed by the pandemic, U.S. beef production increased slightly (less than 1%) in 2020. U.S. beef forecasts suggest that production will increase by less than 0.5% in 2021.

U.S. beef exports decreased by 6% from 2019, but are expected to increase by 6% in 2021. Over 70% of U.S. beef exports were purchased by four countries (Japan, Mexico, Canada and South Korea) in 2020. Beef...