In early 2020, COVID brought travel restrictions, supply chain disruptions and a shift in consumer spending from restaurants to grocery stores. There were also lower ag exports. As the year finishes, all four conditions are improving. Federal Reserve Bank of Kansas City – Omaha Branch Vice President Nathan Kauffman says a big positive is the shift in exports. “The value of the dollar retreated to where we were before the pandemic and commodity prices recovered.” Looking ahead to 2021, Kauffman says profit opportunities for farmers may be more limited. “Going through loan renewal season, there will likely be some challenging conversations on profitability. Profitability will hinge on the persistent strength on ag commodity prices. Prior to the higher commodity prices, government payments offset weakness in the summer months. The outlook for some of these payments will also be important in determining viability of ag operations.”
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