December 21, 2009

Economic recovery should benefit US agriculture

The US agriculture sector should reap some benefits in 2010 from an economic recovery from the global recession.

Consumers should gradually return to buying more expensive cuts of meat in the new year after switching to cheaper cuts to save money, Assistant Vice President said Erin FitzPatrick, Assistant Vice President of Rabobank Food & Agribusiness Research and Advisory. Still, a full recovery in consumer meat demand is not expected until 2011, she said.

Rabobank is "optimistic" about cotton prices as US exports should benefit from China rebuilding its stocks, Executive Director Michael Whitehead said. A cautious recovery in the global economy should also help resurrect demand for cotton products, such as clothing, he said.

FitzPatrick said she is optimistic about higher corn prices due to continued flows of speculative money into the market, a rebound in number of cattle on feed and lower corn planting in South America.

US corn yield reports continue to support production estimates of close to 13 billion bushels, which is approaching record levels, FitzPatrick said. Some of the crop probably won't be harvested because cold, wet weather has delayed combining, she said.

The US Department of Agriculture last estimated US corn production at 12.9 billion bushels and is slated to issue its next update January 12.