USDA Outlook for 2021 Shows Healthy Recovery

By Chad Hart and Lee L. Schulz


Every February, USDA provides its big overall snapshot for the agricultural year ahead at its annual conference, the Ag Outlook Forum. During the forum, USDA brings together industry, academic, and government experts to discuss the major agricultural issues of the day and examine the near-term market outlook for agriculture. The 2021 forum reflected the ongoing challenges with the COVID-19 pandemic as all of the sessions were virtual and much of the discussion hinged on the US agricultural sector’s rebound from the physical and economic impacts from the pandemic.

In general, the view for agriculture in the year ahead is positive. Most agricultural markets, including the major markets for Iowa, have recovered from the depths of the price declines that struck during the early days of the pandemic. Furthermore, the outlook builds upon that improvement, providing projections of better agricultural returns in 2021.

The livestock sector faced more production and logistical challenges due to the pandemic than the crop sector. The shutdowns and slowdowns at processing facilities created significant problems for livestock producers and formed a backlog of animals needing to be processed. However, as the processing capacity came back online, the backlog slowly diminished; and, as USDA statistics show, the annual totals for the livestock industry are remarkably similar to previous years, despite the pandemic.

Table 1 outlines some of the basic numbers for cattle/beef. For the cattle sector, producers had already begun to reduce cattle herds in 2020, before the pandemic. For 2021, that reduction in herd size continues, but the pace of shrinkage is lessening. Despite the processing problems last year, 2020 beef production was nearly equal to 2019 production. Looking forward, USDA expects beef production to increase, based on an increase in total cattle slaughter. The increase in production lines up with a significant shift in beef trade flows. During 2020, US beef exports declined slightly, while imports rose. For 2021, USDA foresees a reversal, with exports growing by roughly 200 million pounds, while imports fall by roughly 400 million pounds, making the United States a net exporter in beef. The additional exports help boost price expectations for 2021, with the 5-Area Steer Price increasing by over $6/hundredweight, approaching the price levels from 2019.

Table 1. USDA Cattle/Beef Statistics
Cattle and calves, Jan. 1(mil. head)94.893.893.6
Cattle on feed(mil. head)14.414.714.7
Beef production(bil. lbs.)
Beef exports(bil. lbs.)
Beef imports(bil. lbs.)
5-Area steer price($/cwt.)116.78108.71115.00


While cattle producers have contracted their herds over the past couple of years, hog producers entered 2020 still in expansion mode. The 78.2 million head of hogs on farm to start the year translated to a record 28.2 billion pounds of pork in 2020, despite the COVID-19 challenges (see table 2). The increase in pork production did put pressure on pork prices, as the national base price dropped by more than $6/hundredweight in 2020. However, international sales for pork provided a price rebound that USDA projects will carry through 2021. For 2021, USDA’s surveys showed a reduction in the number of hogs to begin the year, but the expectation that hog inventories will increase during the year. USDA projects pork production will reach a record 28.7 billion pounds this year and the surge in exports from last year will mostly hold in 2021 as well, with 7.2 billion pounds of pork leaving the country.

Table 2. USDA Hog/Pork Statistics
Hogs and pigs, Dec. 1 (previous year)(mil. head)
Pork production(bil. lbs.)27.628.228.7
Pork exports(bil. lbs.)
Pork imports(bil. lbs.)
National base 51%–52% lean live hog price($/cwt.)47.9543.2550.50


In total, USDA’s projections outline a good year for the livestock industry, with both production and prices increasing. A big key to that outlook is the strength of export sales. That storyline continues even as we shift our focus from livestock to crops.

While the pandemic created some havoc for meat production in 2020, it was the combination of drought and a derecho that impacted the crop sector. For corn, the strength of increased corn plantings gave 2020 the potential to be the first 15 billion bushel crop. However, the drought and derecho reduced yield potential enough to bring corn production below 14.2 billion bushels. Thus, the 2020 corn crop was larger than the 2019 crop, but by a much smaller amount than originally projected. The impact to crops mainly came through biofuels, as the pandemic reduced fuel and biofuel consumption via stay-at-home orders to reduce the spread of the virus (see table 3). Given the timing of the pandemic, that fuel usage decline in the spring and summer of 2020 shows up in the corn grind for ethanol for the 2019 crop. Total corn usage for the 2019 crop was lower than previous years because of that drop, along with a fall in exports. However, this past fall, ethanol production partially recovered and export sales surged to a record pace. Thus, for the 2020 crop, USDA has projected a significant increase in corn usage, with exports leading the way. The growth in usage reduces projected ending stocks and the corn market has seen a sizable improvement in prices, with the 2020 season-average price estimate holding at $4.30/bushel, nearly $.75 above the 2019 estimate. For 2021, USDA projects a 1.2 million acre increase in corn plantings. That, combined with a trend yield of 179.5 bushels/acre, leads to a projection of corn production above 15 billion bushels once again. However, the growth in expected production matches continued growth in usage fairly well, as USDA sees higher feed and residual usage, a larger ethanol grind, and another record for exports. With a small increase in projected ending stocks, the 2021 season-average price estimate remains nearly steady, at $4.20/bushel.

Table 3. USDA Corn Statistics
Marketing year (2020 = 9/1/20 to 8/31/21)201920202021
Area planted(mil. acres)89.790.892
Production(mil. bu.)13,62014,18215,150
Beg. stocks(mil. bu.)2,2211,9191,502
Imports(mil. bu.)422525
Total supply(mil. bu.)15,88316,12716,677
Feed & residual(mil. bu.)5,9035,6505,850
Ethanol(mil. bu.)4,8524,9505,200
Food, seed, & other(mil. bu.)1,4301,4251,425
Exports(mil. bu.)1,7782,6002,650
Total use(mil. bu.)13,96314,62515,125
Ending stocks(mil. bu.)1,9191,5021,552
Season-average price($/bu.)3.564.34.2


Many of the storylines that affected corn also impacted soybeans. However, soybeans have more amplified trade effects. The 2020 soybean crop statistics reflect a general recovery from planting problems and trade disruptions that hit the 2019 crop. As table 4 shows, soybean acreage and production increased, but the drought and derecho limited the growth. International sales this past fall provided a significant boost to the soybean market. USDA expects growth in exports to reduce 2020 ending stocks to 120 million bushels and has raised the 2020 season-average price estimate to $11.15/bushel (a price level the market hasn’t seen in several years). For 2021, USDA projects soybean area will leap again, up to 90 million acres. Given trend yields, that translates to over 4.5 billion bushels of soybean production. However, as with corn, USDA expects soybean usage to match production, as they project domestic crush for livestock feed and biofuel usage to rise once again. The export segment declines slightly, but still holds at 2.2 billion bushels. The 2021 season-average price estimate for soybeans improves to $11.25/bushel.

Table 4. USDA Soybean Statistics
Marketing year (2020 = 9/1/20 to 8/31/21)201920202021
Area planted(mil. acres)76.183.190
Production(mil. bu.)3,5524,1354,525
Beg. stocks(mil. bu.)909525120
Imports(mil. bu.)153535
Total supply(mil. bu.)4,4764,6954,680
Crush(mil. bu.)2,1652,2002,210
Seed & residual(mil. bu.)105125124
Exports(mil. bu.)1,6822,2502,200
Total use(mil. bu.)3,9524,5754,534
Ending stocks(mil. bu.)525120145
Season-average price($/bu.)8.5711.1511.25


The full set of projections reveals a healthy market recovery for Iowa agriculture. Even with projections of record supplies across the board (beef, pork, corn, and soy), USDA expects agricultural prices to hold roughly steady for crops and improve for livestock. Strong international demand supports that price strength. The surge in export sales in 2020 has continued as the calendar turned to 2021 and USDA projects it will continue. While the pandemic did slow down many parts of the US and global economies, it did not hamper agricultural trade and US agriculture is enjoying the benefits of that.

Suggested citation:

Hart, C. and L. Schulz. 2021. "USDA Outlook for 2021 Shows Healthy Recovery." Agricultural Policy Review, Winter 2021. Center for Agricultural and Rural Development, Iowa State University. Available at