The inflated prices for agricultural inputs and the demand for labor will be driving forces in 2022, but here are some other topics of note:
The carbon credit market is gaining interest with co-ops and companies like Cargill offering programs to help farmers find their way to new revenue. Another ongoing storyline will be the development of the world’s biggest carbon capture pipeline, the Midwest Carbon Express. Iowa-based Summit Carbon Solutions is planning a pipeline to connect 31 ethanol plants in five states to store carbon in western North Dakota and sell fuel at a premium on the low-carbon market. Federal incentives are giving carbon storage a boost.
COVID-19 continues to play a role in supply chain disruptions and international travel.
Some Midwest farms rely on workers from South Africa and other countries, so when a new variant pops up, like Omicron did in South Africa, the effect is felt here. Both the World Health Organization and Centers for Disease Control and Prevention have made similar statements: We can’t boost our way out of the pandemic. There’s nothing wrong with boosters but the bigger priority is reaching the unvaccinated.
After vastly different interpretations by the Obama and Trump administrations and court challenges, the Environmental Protection Agency is looking to turn back the clock on the definition of “waters of the United States.” WOTUS rules have vexed farmers and local governments, and the agency looks to reestablish some predictability with a return to the pre-2015, with updates to reflect Supreme Court decisions. A comment period on the WOTUS revision is open through Feb. 22, 2022.
Will the Biden administration or court challenges reverse the trend of consolidation in the meat industry? That’s something to watch for in 2022, as are local efforts to promote smaller meat lockers and direct marketing of meat to consumers. The hog industry remains on the defensive against African swine fever, while BSE, or bovine spongiform encephalopathy, cases in cattle in Brazil are getting attention. Methane from cattle continues to be in the bullseye for environmentalists.
Land values and rents
With land values and commodity prices strong, some landowners will be thinking that it’s time to raise the rent. But with input costs pressuring profit margins, higher rent could be yet another squeeze, says Shelby Myers, Farm Bureau Federation economist. Want to complicate an already complicated situation? Try factoring in carbon credits into a rental agreement.