"Coffee and oats are different kinds of crops, with the former grown in tropical climates, and the latter in northern environments. But they both faced severe weather conditions in the past year, and that often drives up the price increases for food commodities," according to Chad Hart, a professor of economics and crop markets specialist at Iowa State University.
"Oats, on the other hand, faced droughts throughout the western part of the US that began in 2020. Farmers planted less of the grain this year and harvested a lot less, resulting in a 40% reduction this year and pushing up prices," says Hart.
Hart was quoted in a Dec. 22 Herald & Review story, " Stu Ellis: Are we heading toward a soybean oil boom?"
Market economist Chad Hart of Iowa State University says in his monthly newsletter, “If all of the soybean oil from the current domestic crush were utilized for renewable diesel, it would produce roughly 2.8 billion gallons. To meet the capacity targets for 2024 with soybean oil, the US would need to dedicate approximately 90 percent of the current soybean crop. That would create another biofuel boom, if it comes to pass. The key word there is 'if.'”
Driving that “if” will be state and national governmental policy, and international response from OPEC member countries. As Hart says, “Several states, beyond California, are considering low carbon fuel standards, indicating the policy push will continue. The wildcard will be energy prices and if OPEC sees these developments as a big enough threat to their industry.”
Hart was quoted in a Dec. 26 Iowa Farmer Today story, "Weather and politics divide Midwestern farmers in 2021."
The good news for farmers, according to Iowa State University Economist Chad Hart, is that the infrastructure bill included a number of important items for agriculture. Just about every president comes to the White House pledging to pass an infrastructure bill, he says. Biden succeeded.
The ag industry has faced supply chain issues in 2021, with difficulty getting equipment and materials at times.
“Some of it’s still COVID-related,” Hart says. “Some of it’s issues that were problems before COVID, but COVID really increased them. And then there’s some that had nothing to do with COVID.”