Quarterly U.S. Rural Economic Review

The Quarterly - July 2022

Clouds Are Forming - Fears of higher rates and weakening economic conditions linger over the year's second half.

Effects from the pandemic and Ukraine war continue to reverberate through the global economy. Food and energy prices remain high, though prices for underlying commodities have lost upward momentum as economic fears rise. The Federal Reserve is poised to raise rates until it believes inflation has been tamed. Unfortunately, the risk of over- or under-doing it is high given that the lag time between action and reaction in monetary policy can be long. 

Topics in this Issue

  • Architecting an Economic Slowdown
  • Market Volatility Whips Grain Prices
  • Electricity Consumers Should Brace for Big Summer Bill
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The Quarterly - April 2022

Russia’s attack on Ukraine will have long-lasting implications for U.S. rural industries

The Russian invasion of Ukraine has brought on a new set of economic conditions that are reshaping financial and commodity markets. For the remainder of 2022, global growth will be slower and most commodity prices higher than previously expected. Key agricultural inputs are in short supply and energy prices are near multi-year highs despite the biggest ever release from the U.S. strategic petroleum reserves. 

Topics in this Issue:

  • Russia Cannot Unwind Globalization
  • Natural Gas Prices May Cut Into Ethanol Margins
  • Escalating Feed Costs Stifle Growth Trend Despite Stronger Prices
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The Quarterly - January 2022

Omicron Upends Supply Chain Recovery

With cases surging and workers out sick, rural industries are scrambling to minimize disruption.

Against all hope for a better start to 2022, omicron has crashed the New Year’s party. Renewed supply chain disruptions are being felt throughout the economy, causing empty shelves again and threatening to fan the flames of inflation. Effects from the omicron variant should be short-lived relative to delta, but it will be several more weeks before the impact of sick workers passes. 

Topics in this Issue: 

  • Fed Monetary Policy Replaces COVID as Economic Wild Card
  • Back to $6 Corn and $13 Beans
  • Fuel Volatility Returns in an Age of Renewables
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Third Quarter 2021

Adapting to Persistent Supply Disruptions

Entering the final quarter of 2021, the U.S. economy and rural industries seem to be transitioning into yet another phase of the COVID pandemic. As the delta variant surge subsides, and the economic recovery continues at a healthy pace, businesses of all sizes and across most industries are wrestling with perhaps the worst supply chain bottlenecks to date. Supply chain disruptions and labor shortages are adding significant costs to business operations, and consumers will feel these effects through higher prices for months to come. 

Topics in this Issue:

  • Is a Fourth Strong Agronomy Season on the Horizon?
  • Worsening California Drought Crimps Harvest of Tree Nuts and Wine Grapes
  • The Cost of Self-Sufficiency and a Rising Natural Gas Floor
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Second Quarter 2021

A Long Tail: Pandemic After-Effects are Just Beginning

Agri-food invests in resiliency as it benefits from the snapback recovery
The long-awaited period of pent-up, exuberant demand is here. And for all the benefits to businesses and consumers, bumps are unavoidable – labor shortages, price inflation, supply chain disruptions, and uncertainty about what a new steady-state economy will look like. They loom large, even as we celebrate a return to normalcy.

Topics in this Issue:

  • Booming Demand, Limited Supply Response Will Support Animal Protein Prices Through 2021
  • Historic Drought Shrinks Crop Prospects in Western U.S. 
  • Communications M&A Still Robust, White House Readies Broadband Funding Spigot
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First Quarter 2021

We’re Not Going Back to Pre-COVID Conditions

In Washington, policy focus is shifting to building for the future. On the rural front, agriculture has its swagger back.

Anticipation of a return to normal is in the air. But for the economy and rural industries, there will be no going back to pre-COVID conditions. The combination of trillions of dollars in federal stimulus spending, warm weather, vaccinations, and a persistently dovish Fed will soon generate a burst of economic activity unparalleled since 1984. But the impending release of cash-rich, inoculated consumers has spurred concern about a risk that’s also been dormant since the 1980s: inflation.

Topics In this Issue:
  • Historic Winter Storm Couldn’t Disrupt Beef’s Robust Start to 2021
  • Trade Logistics Snarl U.S. Dairy Exports
  • What Does “Build Back Better” Mean for Energy and Water?
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Fourth Quarter 2020

New Year Optimism Confronts the Pandemic

With difficult months still ahead, second half of the year should power the U.S. economy

2021 has quickly altered the political and market landscape. And optimism, particularly about the second half of the year, is rising. But to get there, all of us must
muddle through for a few months more.

Topics In this Issue:
  • $5 Corn and Beans in the Teens
  • Cable Broadband Soars, Video Dives
  • Year-end Natural Gas Price Collapse Thwarts New Year
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Third Quarter 2020

The Fragile Recovery is About to be Tested

Rebounding from the virus has been difficult, and more challenges lie ahead.

The coronavirus pandemic has now impacted all four quarters of 2020, and seemingly every aspect of life and business. The U.S. economy has been improving since late spring, but progress has slowed measurably, and with broad fiscal relief now off the table at least in the near-term, the economy will likely end the year in a fizzle.

Topics In this Issue:
  • The Candidates’ Best Laid Economic Plans
  • Grains Exports: Will Actual Shipments Follow Recent Large Sales to China?
  • Cheese, Butter Stocks Rise Heading into Holiday Season
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Second Quarter 2020

Rural Resilience in the Pandemic

Over the past two decades, the U.S. rural economy has trailed the urban economy in just about every measurable category, including GDP and employment. The rural-urban divide grew particularly wide during the years following the 2008-09 financial crisis. But that trend may be changing.

Topics In this Issue:
  • Dented Food Service Demand Defines Q2
  • Dairy Sector Struggles Through Extreme Market Volatility
  • What the “New Normal” Signifies for Rural Energy and Water
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First Quarter 2020

Coronavirus Testing Labor and Supply Chains of Essential Rural Industries

COVID-19 has brought the U.S. economy to a screeching halt, and ushered in a recession in the process. The number of U.S. coronavirus cases is now expected to peak by late April, and the economy should begin to come back to life in May. 

Topics In this Issue:
  • COVID-19 Disrupts Labor, Supply Chains and Consumer Behavior
  • Macro Economic Outlook
  • California’s Water Law will Stress Irrigators
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