2021 Insights & Perspectives

ECONOMIC ANALYSIS AND PAPERS ON AGRICULTURE, COMMERCIAL FISHING AND THE FOREST PRODUCTS INDUSTRY.

NORTHEAST AGRICULTURE

INSIGHTS AND PERSPECTIVES

2021 INSIGHTS AND PERSPECTIVES What a year 2020 was as the COVID-19 pandemic affected us all in ways no one anticipated. We began the year with a relatively “normal” couple of months, but the second quarter brought dramatic changes to our lives as schools, restaurants, retail stores, travel-related businesses and virtually any public gathering space shut down or was severely restricted.

Thankfully, our food supply chains showed a remarkable ability to pivot from foodservice markets to retail stores.

By summer, most commodity prices had shown recovery and the various surpluses and shortages had largely been sorted out. Consumer spending rebounded and much of it shifted closer to home as people desired more products from local producers and increased their spending on home and garden. Many farmers who sell direct-to-consumer ended up having one of their best seasons ever. Northeast producers showed tremendous resilience in the face of the most unusual year we’ve seen in our lifetimes.

At Farm Credit East, we were affected as well and have taken major steps to continue to serve our customers while keeping everyone safe. Our Knowledge Exchange outreach and educational programs, typically a mix of online and live events, were shifted entirely online as we sought to keep you up to date on tax law changes, relief programs and industry outlooks. Throughout all of this, serving you, the Northeast agricultural, commercial fishing and forest products producers, has remained our top priority.

One thing that has not changed in the past year is our commitment to provide reliable credit and high-value financial services to our members.

As we look ahead in uncertain times, we hope that our Knowledge Exchange Partner e-newsletter, webinars and publications like this one are helpful. In this publication, we’ve tapped thought leaders in various industries to give you their outlook for the coming year. We hope that you find these Insights & Perspectives informative as you make plans for the year ahead. And whatever this year brings, know that your cooperative remains rooted in agriculture and is by your side every step of the way.

Michael J. Reynolds Chief Executive Officer Farm Credit East

CONTENTS 1 T HE NORTHEAST FARM ECONOMY Chris Laughton, Farm Credit East

8 CYBERSECURITY OUTLOOK Deanna Pellegrino, Farm Credit East

12 2021 U.S. DAIRY SITUATION AND OUTLOOK Christopher Wolf, Cornell University

14 U.S. GRAIN & OILSEEDS

Kenneth Scott Zuckerberg, CoBank

18 NORTHEAST FISHERIES John Sackton, SeafoodNews

20 2021 OUTLOOK FOR THE GREEN INDUSTRY Dr. Charlie Hall, Texas A&M University

24 NORTHEAST FOREST PRODUCTS INDUSTRY REVIEW & OUTLOOK Paul Jannke, Forest Economic Advisors

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THE NORTHEAST FARM ECONOMY THE NATIONAL ECONOMY C HRIS LAUGHTON DIR E CTOR OF K NO WLEDGE EXCHA N G E FA RM CREDIT EAST

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The impact of the COVID-19 pandemic on the U.S. economy has been profound and something we have simply not seen before in modern times.

This impact has been highly variable by industry. While nearly every business has been affected to some extent, many “essential” sectors, such as agriculture, grocery, healthcare and some others, have seen business volumes increase. Meanwhile, sectors such as restaurants and bars, entertainment venues, travel and tourism, brick-and-mortar retail, and others have suffered tremendously. As we enter 2021, most businesses are open, but some, such as those in the travel sector, will have a long road to full recovery.

2021 INSIGHTS AND PERSPECTIVES

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The pandemic had a significant effect on consumer spending, which constitutes the bulk of U.S. GDP. In 2020, Americans spent about $12.5 trillion on goods and services, more than half a trillion less than in 2019. While spending is recovering, it will likely take until 2022 to match pre-pandemic levels.1 The pandemic not only reduced overall spending, it shifted much of that spending closer to home. Home and garden retailers and service providers have seen an increase in demand, as have many agricultural retail businesses that offer local recreational opportunities.

In the labor market, unemployment surged from a 50-year low of 3.5% in February, to 14.7% in April — a level not seen in the post-WWII era. It has since sharply declined as many furloughed workers have been recalled, reaching 6.7% in December. While job recovery continues, it has slowed as economic growth has tapered, and the remaining jobs lost due to COVID-19 may be slower to come back. 2 A significant factor in the economic recovery has been an unprecedented level of government stimulus. Thus far, the U.S. government has made roughly $2.6 trillion in new funding available for direct payments and to federal agencies for pandemic response, and made an additional $902 billion available in tax relief, for a total boost of $3.5 trillion. This represents nearly three times the total economic stimulus deployed for the 2008 financial crisis. 3 It is unclear what stimulus spending will look like in 2021.

We enter 2021 with a great deal of uncertainty, which makes economic predictions difficult. While the approval and deployment of COVID-19 vaccines holds great promise, we have already seen problems in distribution and a slower-than-expected rollout to early recipients. How quickly the general population can be vaccinated and how effective this will be at ending the pandemic remains unknown. Meanwhile, the virus continues to to spread in many areas, prompting pressure for states to continue stay-at-home orders.

While there is some indication of pent-up demand from consumers who have been stuck at home, unemployment remains elevated, many businesses continue to operate at reduced capacity, and bankruptcies and closures continue. While 2021 is likely to 1 6

be a better year than 2020, the severity of the hangover from COVID-19 and the long-term fallout to the business landscape is something that remains to be seen.

INTERNATIONAL TRADE With the COVID-19 pandemic occupying the attention of most nations, trade has generally taken a back seat recently. Still, there have been some developments.

The U.S.-Mexico-Canada Agreement (USMCA) took effect on July 1, 2020 after Canada ratified the agreement in March.

The agreement generally continues the major provisions of its predecessor, NAFTA. It contained some changes to the treatment of automobiles, intellectual property and, most notably for agriculture, promised greater access for U.S. producers to the Canadian dairy market, a provision that was controversial in Canada. There has already been conflict between the U.S. and Canada on this provision, with the U.S. alleging that Canada has failed to allow the agreed access. The U.S. Trade Representative initiated “official consultations” with Canada on December 9, the first step in dispute resolution under the USMCA agreement.4 The U.S.-China “Phase one” trade deal helped boost Chinese imports of U.S. agricultural goods. While China’s purchases remain well short of the deal’s ambitious goals, its imports of soybeans have increased 18%, corn imports are 97% higher, sugar increased 28% and wheat imports increased by 163% compared with 2019. The outlook is for China to continue its aggressive buying of U.S. agricultural commodities in 2021, as its swine herd recovers from African Swine Fever and its grain inventories have shrunk.5 On December 30, the U.S. government increased tariffs on a number of European Union products, including aircraft parts, wines and spirits. The EU is expected to retaliate against U.S. imports and could target some agricultural products. The escalation relates to a long-running dispute over U.S. subsidies to Boeing and EU subsidies to Airbus.6 All-in-all, despite various trade disagreements and disruptions related to COVID-19, U.S. agricultural exports increased slightly (+2%) in 2020 compared to 2019, although they remain below the peak year of 2014.7 U.S. agricultural exports are expected to continue to grow through 2021.

The Brookings Institution 2U.S. Bureau of Labor Statistics 3McKinsey & Company Insights 4Farm Journal 5Successful Farming Office of the US Trade Representative 7USDA Foreign Agricultural Servic

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NET FARM INCOME PROJECTION

NET FARM INCOME ESTIMATE FARM CREDIT EAST STATES

• On a state-by-state basis, in November, there were gains in production in California (2.6%), Idaho (2.0%), Michigan (3.6%), New York (2.1%), Texas (9.8%) and Wisconsin (2.7%), while other states showed decreases including Vermont (-3.3%), Arizona (-2.1%) and Florida (-4.3%).

• National cow numbers increased 0.7% year-over-year (+62,000 head). New York cow numbers were flat at 626,000. 9

2,000,000

• Total U.S. dairy exports for 2020 through November were valued at $6.06B, a 10% year-over-year increase and a new record. Overall product volume exported increased 13%, year-over-year, largely due to a significant increase in exports to Southeast Asia.

1,500,000 1,000,000

TIMBER AND FOREST PRODUCTS

500,000

• LUMBER

-

2015

2016

2017

2018

2019

» New home construction and remodeling demand was stronger than expected for most of 2020. Despite a 30day decline in prices that bottomed at $600/MBF in October, East Coast random length Spruce/Fir 2x4 prices climbed back to $1,000/MBF by mid-December. Demand is anticipated to stay strong throughout 2021 as a result of housing stocks that have been underbuilt since the 2008 financial crisis and low long-term interest rates.

2020

OTHER

FRUIT

GREENHOUSE / NURSERY

CASH FIELD

VEGETABLE / AG RETAIL

DAIRY

States Included: CT, ME, MA, NH, NJ, NY, RI Source: Farm Credit East Knowledge Exchange estimates. Does not include estimates of forest products or commercial fishing income in the region.

» Despite some recent price improvement in a few species due to robust remodeling, hardwood markets continue to struggle, impacted by declines in both domestic and international demand, as well as the emergence of new, substitute engineered wood products. This segment of the lumber market continues to be the most challenged from a profit standpoint and it is expected that many hardwood mills will struggle with profitability in 2021.

NORTHEAST FARM ECONOMY DAIRY • Milk price forecasts for 2021 from cooperatives have diverged, with some projecting a slight increase, while others suggest a decrease.

• 2020 Boston Blend pricing began the year at $18.78/cwt. but declined to $13.47 in May. It recovered to $18.27 in November and came in at $17.08 for the year’s average.

• PULP AND PAPER

• The USDA all-milk price forecast for 2021 is $16.60/cwt.8 • U.S. Milk production increased by 3.0% year-over-year through November 2020. Both the national herd as well as milk-per-cow increased.

8

» There is little change in overall pulp and paper markets, with free sheet, super calendar and newsprint remaining under pressure and declining, while tissue, container board and packaging have been returning positive margins.

TUSDA WASDE, December 2020. 9USDA / NASS Milk Production Report 10US Dairy Export Council

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• LOGGING » It was a difficult year for many contractors as a result of the reduced capacity of some low-grade markets, which take the bulk of the timber harvest.

CASH FIELD CROPS • 2020 corn planted area came in at 91.0 million acres, a 1.4% increase over 2019. National yield averaged 175.8 bu/ac, 5% greater than 2019, but below 2018. Total production is estimated at 14,507 million bushels, 6.5% higher than 2019.

• Corn yields in New York averaged 166 bu/ac according to NASS, but were variable, with producers in some areas reporting yields over 200 bushels, while others experienced dry conditions and lower yields. South Jersey reported above average yields.

• Soybean planted area came in at 83.1 million acres, a 9.2% increase over 2019. National yield averaged 50.7 bu/ac, 7% greater than 2019 and even with 2018. Total production is estimated at 4,170 million bushels, 17.4% higher than 2019.11 • Soybean yields in New York averaged 50 bu/ac, but as with corn, were variable, with producers in some areas reporting yields over 55 bushels, while others experienced lower yields.

Wheat crops reportedly had good yields as well in most areas.

• U.S. ethanol production decreased sharply in 2020, driven by significant reductions in domestic gasoline demand as well as reduced exports. Production bottomed out in May, at approximately 500,000 barrels/day, 50% below the 5-year average, before starting a slow recovery.12 2021 production is expected to increase as gasoline demand is restored, but is still likely to lag 2019 production levels.

• Corn exports for the 2020/21 crop year are expected to come in substantially higher than last year due to strong demand from China and other importers, as well as weather-related production decreases in other exporting countries.

• Soybean demand is likewise at a record pace, both domestically and internationally.13 • USDA forecasts corn prices for the 2020/21 market year at $4.00 (2019/20: $3.56), and soybeans at $10.55 (2019/20: $8.57).

LIVESTOCK • 2020 average prices for Choice Steers came in at $108.46/cwt., marking the second year of declines. 2021 average prices are forecast at $115/cwt, showing some recovery, but still coming in below 2018 and 2019. Despite lower farmgate prices for commodity beef, prices for beef marketed to local consumers have generally held steady.

• Northeast specialty meat producers have had to pivot away from restaurant markets and toward individual sales to consumers in many cases. While the demand has generally been strong, this has been a challenging adjustment for some.

• Seasonal cycles continue to affect slaughter availability in the region, with capacity constraints affecting some Northeast producers.

• Egg prices trended higher in 2020. Prices surged in the first quarter but have backed off since. Flock sizes have trended downward due to reduced demand from foodservice markets.

Feed prices have increased over the past couple of months. The 2020 season average came in at $1.12/doz, compared to $0.94 in 2019. The 2021 forecast is for $1.06/doz.

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USDA WASDE December 2020. 12U.S. Energy Information Administration 13USDA ERS FARMCREDITEAST.COM

• Pork exports have substantially increased due to rising demand from China. Broiler exports are also higher, but to a lesser extent. Beef and turkey exports declined somewhat in 2020.

• Horse racing and recreational equine businesses have been significantly impacted by COVID-19. Attendance at tracks and recreational events has declined due to the pandemic.

FRUIT

» New Jersey highbush growers reported an average-sized crop, with good prices in 2020 due to short crops in other states. In Maine, prices for lowbush blueberries have shown some recovery, although the volume harvested has declined.

Some New Jersey growers reported a smaller-than-normal strawberry crop this season.

• CRANBERRIES

• APPLES » The fall harvest is complete and estimates are for a smaller Northwest crop, which typically drives the market. The USDA estimate for the 2020 Washington apple crop is 7.40 billion pounds, a 3% decrease from 2019’s large harvest, but still slightly greater than their 5-year average. The national crop is expected to come in around 3% below the 5-year average due to declines in other states. » New York’s harvest is estimated at 1.30 billion pounds, 2% below 2019 and 2% below the 5-year average.14 » A smaller crop, improving export markets and solid domestic demand have improved the pricing and profit outlook for 2021.15 » Producers with modern, in-demand varieties should see positive profits, while those with more dated varieties may struggle with soft pricing. » Pick-your-own and retail orchards saw very strong demand this past fall due to consumers’ desires for recreational opportunities after being stuck at home by COVID-19 restrictions. » New Jersey peach growers reported a poor crop due to weather damage.

• WINE/CRAFT BEVERAGE » COVID-19 hurt this sector early in the pandemic as many tasting rooms were forced to close. By summer, however, most wineries were open for business and many saw strong customer traffic and sales.

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• SMALL FRUITS

» National production for 2020 came in at 8,970,000 barrels, 2% greater than the 5-year average. Massachusetts production was 2,400,000 barrels, 8% greater than the 5-year average. Retail juice sales have increased substantially as a result of COVID-19 which has helped pricing.

A QU AT IC / F I S HING • LOBSTER » Prices were below the 5-year average for much of 2020 due to the loss of restaurant and export markets. However, since August, prices have substantially recovered and are now in line with 2019 levels. » Issues surrounding the endangered Northern Right Whale and possible fishing restrictions continue to concern the lobster industry.

• SCALLOPS » Scallop prices have held up well. They are seeing over $15/lb. for 20-30 scallops which is very high. The trend the last couple of years shows high pricing from October – February (cold weather months).

• GROUNDFISH » Regulations and quotas remain limiting for the industry.

Prices have suffered due to COVID-19 restrictions on restaurants.

• AQUACULTURE » In Farm Credit East’s territory, these producers are highly dependent on foodservice sales and thus have suffered due to COVID-related restaurant closures.

USDA NASS 15Northwest Farm Credit Services

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V EGE TA BL E S

GREENHOUSE AND NURSERY

• The Northeast experienced significant drought in 2020, particularly in New England, where some areas saw severe or extreme drought, according to the USDA. While most vegetable growers have adequate irrigation resources, the drought still caused stress to crops and additional work for producers.

• Growers primarily selling to grocery stores have seen strong sales, while those who previously sold mainly to restaurants or foodservice distributors have had to adjust their marketing.

• For growers selling direct-to-consumer, demand for local produce has been strong, and some CSA farms reported their strongest year ever. However, operators of farm stands and farmers’ markets have had to make significant adjustments to deal with the pandemic, and sales have varied. In many cases, operators who adapted their direct-to-consumer business model realized a significant improvement to gross and net profit margins.

• 2020 was an exceptional year for the green industry overall. Sales generally continued strong into summer and fall for most greenhouse, nursery and sod producers. Many producers report being able to increase prices and margins in 2020.

• Key contributors to strong results were 1) early business designation as ‘essential’; 2) pro-active and upbeat management of customer and staff COVID-19 protocol compliance; 3) rapid adoption of social distancing compliant processes (online or remote payment, delivery/loading mechanics, focus on customer traffic flows, etc.); 4) supplychain management; and 5) ultimately most critical — full sellthrough of inventory without material levels of discounting.

• Sod sales declined early in the season amidst a slowdown of construction and landscape activity but have generally recovered and continued strong well into the fall.

• Vegetable processors in New York are at capacity, demand has picked up as home cooking has utilized more frozen and canned vegetables. The industry continues to consolidate, with no new players entering the market. Processors are reluctant to place extra capacity as market decline had been steady prior to 2020. Growers of sweet corn, snap beans and peas usually have soybeans and corn as an alternative and will shift to commodity grain if processors remain at 2020 pricing.

• Keeping workers healthy has posed significant challenges, especially for farms with worker housing.

• The availability and cost of labor remains a significant challenge for the sector. Initial concerns about the availability of H-2A workers were largely resolved, but both minimum wage and the Adverse Effect Wage Rate for H-2A increased significantly in many Northeast states. Growers have had to closely monitor their labor costs and try to gain efficiencies in order to remain profitable.

• In 2020, New York instituted a 60-hour threshold for overtime, which most farms were able to adjust to. The Farm Wage Board determined there would be no change in the threshold for 2021 • POTATOES » The growing season in Maine was one of the driest on record, and a series of frosts in late September brought the growing season to an earlier-than-expected end. Yields vary widely across the region and are reportedly down 20-40% from last year, although some irrigated acreage produced above-average yields. » All market segments are seeing strong demand for potatoes, with prices above last year. Contracted production slated for French fries are returning better prices due to improved quality from last year, despite the smaller crop. Tablestock markets in Maine also remain strong with prices $1-$4 per cwt above last year, depending on variety. Seed potato markets also remain strong due to reduced overall supply and acreage cuts in other growing areas. Seed supplies are expected to be extremely tight heading into 2021.

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CYBERSECURITY

OUTLOOK

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D E A N N A P ELLEGR I N O I N F OR M AT I ON S E C U R I TY SP EC I A LI ST FA R M C R EDI T EA ST

As we enter a new year, we must keep a strong focus on cybersecurity. Farm Credit East’s cybersecurity program safeguards our customers’ sensitive data. Because the security of customer information is so critical, we are taking the necessary steps to ensure there are protective measures in place to block unauthorized access of data from unauthorized machines, websites and individuals. As we move forward, we want to keep a few things front of mind around the security of data within the organization.

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WHERE DO CYBER ATTACKS 48% OF MALICIOUS EMAIL ATTACHMENTS ARE OFFICE FILES.

65% OF GROUPS USED SPEAR-PHISHING AS THE PRIMARY INFECTION VECTOR.

KEEPING DATA SAFE As we continue to strengthen our security posture, there are important key factors to note. Cyberattacks will always be a threat to any organization. However, Farm Credit East has made significant efforts to ensure our devices are protected by following industry standards and best practices. With antivirus, vulnerability management and data loss protection software installed on all machines on our corporate network, we are providing safeguards on our endpoints. This will protect us against many different types of cyberattacks and viruses. Partnering with FPI, we are constantly on the lookout for any potential vulnerabilities on devices within our organization to ensure they are patched in a timely manner.

DATA LOSS PREVENTION PROGRAM We also continue to advance our data loss prevention program.

Our data loss prevention tools allow us to protect, monitor and control confidential information across a multitude of applications and endpoints. We continue to improve business processes to eliminate practices that could potentially put data at risk. Utilizing secure messaging is an important way to ensure that the data being exchanged is only received by the intended party. When a secure message is received by a customer, the customer must successfully log into a secure website to read the message. This ensures there are multiple places in which the recipient must prove their identity in order to be authorized to view the data in the message.

SECURITY AWARENESS PROGRAM Security awareness training has and will be a focus in our cybersecurity program as well. Farm Credit East staff are provided additional and more advanced training, as well as take part in many phishing email tests that we conduct internal to the organization.

Phishing attacks are one of the greatest risks any organization will experience. This is because we must rely on staff’s ability to react to any email that seems suspicious. Cyber criminals often try to convince users via email that their email is a legitimate one, stating they need an urgent reply, have an important attachment included, or that a delivery has been made and need the recipient to click on a link. If a user is tricked into clicking on the email, the cyber criminal may gain access to the user’s computer, credentials or accounts.

P HI S HI NG ATTA C K S A C C OU NT FOR MORE THA N

80% OF RE P ORTE D S E C U RI TY I NC I DE NTS .

CSO Online

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COME FROM? 34% OF DATA BREACHES INVOLVED INTERNAL ACTORS.

Farm Credit East has processes in place for staff to report any email they believe may be malicious, where it is then examined and verified. In the event follow-up action is needed, we block the senders of such emails and give direction to any additional staff that may have received the same email message. As we keep our staff up to date on the latest threats and test against them, we will also provide additional information to our customers because they are also potential targets of phishing attacks. Farm Credit East has recently made our security awareness training available to customers as well.

SECURITY ACCESS REVIEWS Farm Credit East also ensures that our staff have only the access necessary to perform their duties. This is called “least privilege access.” This ensures that access to data is only granted to specific staff members and that access is appropriate for the business process being executed. All others do not have the ability to view or modify the sensitive information. This greatly reduces the risk of data compromise – either accidental or intentional.

$17,700 IS LOST EVERY MINUTE DUE TO A PHISHING ATTACK.

As process and personnel changes occur over time, we also perform regular, routine reviews of staff access to our systems to ensure that staff members only have access to what they need.

We have many reviews of this access and it is well documented so that we can follow a trail of evidence as to who has access to sensitive data.

In today’s world, cybersecurity is a big part of our day-to-day life. And as we look ahead, the threat landscape is constantly changing. Farm Credit East must remain vigilant against potential threats to our environment. With security monitoring tools in place, advancing our data loss prevention and security awareness programs, and routine reviews of security access, we are taking the necessary steps to safeguard against potential future threats.

DATA BREACHES BY THE NUMBERS $ HACKERS ATTACK EVERY 39 SECONDS, ON AVERAGE 2,244 TIMES A DAY. NORTHEAST AGRICULTURE

DATA BREACHES EXPOSED 36 BILLION RECORDS IN THE FIRST HALF OF 2020.

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AVERAGE ANNUAL SECURITY SPENDING IS $2,691 PER EMPLOYEE. 11

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2021 U.S. DAIRY SITUATION & OUTLOOK

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C HRISTOP HER WOL F C O R N ELL UNIVERSI TY

In 2020, the net income for a

The Food Box program purchased approximately one percent of the total butterfat produced domestically in 2020, which significantly affected markets. These purchases were important in supporting milk prices and limiting dairy stock growth as well as feeding needy families.

where their milk was shipped.

SNAP benefits can, of course, be used to purchase dairy products but are unlikely to result in as much dairy products purchased as the Food Boxes. A recent study concluded that about 13.5% of SNAP expenditures were spent on dairy products, meaning that Food Box expenditures, on average, spent about 50% more on dairy than SNAP. It is possible that the Biden administration will continue the Food Box as it was used in 2020, but if the administration moves toward a different model, such as increasing SNAP, it could have implications for the milk price.

The Dairy Margin Coverage (DMC) program generated some large payments in the spring months and was potentially a boon for small or medium sized herds with what is effectively a cap at five million pounds of production. Dairy Revenue Protection (Dairy RP) provided significant indemnities for many who enrolled, but that depended very much on timing and contract specifics.

Another important demand consideration is export markets. U.S. dairy exports were strong in 2020 with China and Southeast Asia generating particularly strong demand. China’s economy, in particular, recovered the last two quarters of 2020 resulting in an annual GDP growth rate of 2.3%. GDP growth in 2021 for China is supposed to approach, or even exceed 8%, which may encourage further dairy product demand.

given dairy farm depended on three factors: whether they signed up for risk management programs, how much they received in government payments, and

Government payments to dairy farmers in 2020 were primarily comprised of Coronavirus Food Assistance Program (CFAP) payments, which averaged $2.45/cwt of milk depending on farm organization and payment limits. Finally, the coronavirus pandemic made winners and losers up and down the food chain depending on factors such as the market outlet (food at home vs. away from home).

The level of uncertainty around milk prices in 2021 is exceptionally high. Until COVID-19 is under control, the economy simply cannot revert back to normal activity in many sectors. This puts a drag on any business that relies on face-to-face interaction for commerce and also means that government purchases are important to fill demand.

In 2020, government spending through existing programs such as the Supplemental Nutrition Assistance Program (SNAP) and The Emergency Food Assistance Program (TEFAP) were supplemented with the USDA’s Farmers to Families Food Box Program. The Food Box Program focused on dairy products, even with an option for only dairy products in the box. The result was that about 20% of total Food Box expenditures were spent on dairy products.

NORTHEAST AGRICULTURE

“Milk production ramped up in the second half of 2020 and investments made with government payments are likely to encourage milk production into 2021. U.S. milk production in December 2020 was 3.1%

Milk production ramped up in the second half of 2020 and investments made with government payments are likely to encourage milk production into 2021. U.S. milk production in December 2020 was 3.1% higher than a year earlier. This growth was generated by increasing the national milking herd by more than 100,000 cows (+1.1%) and increasing milk per cow by 2.0%. The need to balance increasing milk supply has resulted in significantly higher butter stocks to finish 2020, which will overhang the market in 2021.

A key factor to watch on the supply side is feed prices. The current forecast for feed prices — most notably corn and soybeans — are for the highest prices in many years. Weather events in the southern hemisphere coupled with exceptionally strong demand from China have conspired to pull down stocks and produce $5/bu corn and $15/bu soybeans.

Ultimately, these feed prices will depend on acres planted and weather in summer 2021 but it bears watching. Historically, U.S. farmers have been very good about finding corn and soybean acres. Another effect of high feed prices, if they continue, will be the potential to trigger DMC payments.

While the futures markets are not particularly good at forecasting sudden changes due to supply or demand shocks, they are very efficient at forecasting average price level in general. At the current time, the futures market is forecasting about $16.75/cwt for Class III and $15.25/cwt for Class IV. The uncertainty in the market is evident in how much milk production and government program announcements generate large futures price changes. The question for any given farm then becomes what the “basis” and net milk price will be, which depends on the pool value and many other factors, including risk management programs.

higher than a year earlier.”

The most important destination for U.S. dairy exports is Mexico and its economy is struggling mightily with COVID-19.

Cumulative U.S. dairy exports to Mexico declined by more than 15% in volume terms in 2020. Additionally, other major dairy exporters including the EU and New Zealand have made in-roads into the Mexican market in recent years after signing new trade agreements. Continued U.S. milk production growth will require exports to balance supplies.

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U.S.

GRAIN & OILSEEDS

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K E N N E T H S C OT T Z U C K ER BER G L E A D E C ON OM I S T, G R A I N A N D FA R M S U PP LY, C OBA N K

The Cycle Has Turned An explosive rally in grain prices — driven by a smaller-than-expected U.S. harvest, strong China export demand, dryness concerns due to La Nina, and resulting tight corn and soybean stocks — dramatically changed the financial outcome of the 2020/21 planting season.

The resulting effects were as follows: Growers were able to sell grain to elevators at higher-than-expected price levels, thereby boosting farming margins and cash income. As farmers rushed to sell and lock in high prices, elevators in turn accelerated merchandising activity and were able to capture strong margins on old crop, as well as on new crop which they bought and resold into a rising market. While we expect volatility, corn and soybean prices should continue to be supported by export and domestic demand, concerns about the size and quality of the Brazilian and Argentinian crops due to expected dry weather related to La Nina, and stable ethanol production (although reduced relative to pre-COVID).

How We Got Here The 2020 growing season began with a dramatic COVID-19 driven economic recession, considerable trade uncertainty and, following the March 31, 2020 Prospective Plantings report, expectations for a very large U.S. corn and soybean crop. The season then got off to a very favorable start and crop 1

progress for the three major grains were well above average for the past five years until late July 2020.

Then came the Iowa derecho weather event that inflicted damage on crops and grain storage facilities, followed by hot weather, dryness and crop stress.

Fast forward to November and the USDA World Agricultural Supply and Demand Estimate’s (WASDE) production estimates and ending stocks had tightened considerably, confirming the recent price rally in U.S. grain prices and setting up a very bullish picture heading into 2021.

Amidst the commodity price rally, grain elevators found themselves in an ideal trading environment because of an intersection of factors: • Early in the 2020 growing season, expectations for a large crop resulted in low estimates of average farm gate prices at harvest, specifically $3.20/bu for corn and $8.40/bu for soybeans.1 • As prices began rallying in the fall towards $3.75 and $10.25, respectively, growers began contracting with elevators in order to lock in what had previously been unobtainable profits for the 2020-21 crop.

• Then, as prices further strengthened, elevators were able to sell stronger basis after having already bought basis cheaper into a marketplace with robust demand from both local processors and export sales to China.

WASDE Report, May 2020.

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EXHIBIT 1– CORN AND SOYBEANS STOCKS-TO-USE RATIOS STOCKS-TO-USE CORN

SOYBEANS

25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2013/14

2014/15

2015/16

Source: USDA-WASDE; 2020/21 figures are projected as of 1/12/2021

The aforementioned grain trading activities increased the need for borrowings by elevators to fund the mismatch between current cash outflows for grain purchases and delayed capital inflows such as payables from processors and exporters. While this has caused financial leverage to increase, CoBank views this as temporary and manageable by elevators.

In the near term, corn and soybean prices should continue to be supported by concerns about the size and quality of the Brazilian and Argentinian crops due to expected dry weather conditions related to La Nina, strong export demand by China, steady domestic feed demand, and stable U.S. ethanol production.

While wheat prices had been on a bullish uptrend recently — driven by drought conditions in the western U.S., tighter U.S. supplies of soft red winter wheat, and dry weather in key regions that compete with U.S. wheat exports such as Russia, Ukraine and Argentina — both cash and futures prices have pulled back recently. The relaxing of export quotas on exported Russian wheat and a return of Australian wheat

16

2016/17

2017/18

2018/19

production are additional bearish factors for wheat prices.

The inversion of forward price curves, especially for soybeans, will continue to result in a backwardation market environment during early 2021. Looking out toward the start of next year’s U.S. spring planting season, we expect the market to begin factoring in large planted soybean acres in 2021. Should acreage and yield expectations rise beyond current trade estimates, cash prices might correct and therefore the forward curves could flatten.

The China Situation In recent months, China contracted to import a considerable amount of grain which underpins USDA’s 30% expected increase in total U.S. corn, soybean and wheat bushels exports during crop year 2020/21 (Exhibit 2). China’s appetite for U.S. grain has been driven by the following: • The need for animal feed (soybean meal and corn) as the country rebuilds its hog herd following the decimation caused by African Swine Fever (ASF);

2019/20e

2020/21p

• Local crop shortfalls due to flooding and COVID-19 production disruptions, which has driven up the price of local grain; • An increase in purchasing power resulting from weakness in the U.S. dollar relative to China’s yuan throughout 2020; and • Apparent desire by China’s government to satisfy some 2020 trade deal obligations.

“

...the U.S. will need to develop more traction with export markets outside of China in order to justify current levels of domestic grain production.

”

FARMCREDITEAST.COM

Our bullish opinion about continued grain purchases by China in the nearto intermediate-term stems from three variables: core demand, FOREX and economic growth.

• Core Demand: China needs to feed its people and will continue to expand its animal protein production capabilities, a positive demand driver for U.S. soybean, soybean meal and corn.

• Foreign Exchange Rates: The U.S. dollar has weakened relative to the Chinese Yuan and may continue to do so short term.

EXHIBIT 2– WASDE GRAIN EXPORT ESTIMATES AS OF JANUARY 2021

CORN

SOYBEANS

WHEAT

7,000 6,000 MILLION BUSHELS

Looking forward, market signals appear very bullish for continued China purchases, although we continue to vigilantly monitor the relationship with booked sales and accumulated exports.

We would also point out that over the long term, there is high degree of risk that China will contract for grain from sources other than the United States.

Thus, the U.S. will need to develop more traction with export markets outside of China in order to justify current levels of domestic grain production.

5,000 4,000

1,051 1,176

864

778

1,639

1,842

1,943

1,921

1,867

2013/14

2014/15

3,000 2,000

985

906 937

2,166

2,134

1,899

2,294

2,438

2,066

2015/16

2016/17

2017/18

2018/19

1,752

965 2,230 1,682

1,000 -

1,778

2,550

2019/20e 2020/21p

Source: USDA-WASDE; Export Estimates and Projections as of January 2021.

• Economic Growth: Although China’s reported economic figures are often suspect, the country’s post COVID-19 economic recovery seems to be gathering momentum based on several anecdotal channel checks.

We are closely monitoring factors related to logistics, specifically container demand vs. supply.

Conclusion Grain has been flowing with considerable momentum, following an orderly fall harvest and amidst a sharp, unexpected price rally. The continued inversion of corn and soybean futures prices will likely continue for the foreseeable future.

Looking to the spring, we expect 2021 to be a very good agronomy season due to a resurgence in crop input demand by growers who finished 2020 in a very strong financial position.

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2021 INSIGHTS AND PERSPECTIVES

17

NORTHEAST FISHERIES JO HN SACKTON FO UNDER, SEAF OOD N EW S

New England is home to the most valuable fishery in the United States, primarily due to lobster and scallops.

fishermen contemplated parking their boats due to fear of market prices not covering their costs.

Landings in Maine have been trending downward over the past few years.

Although data for 2020 is not yet available, most observers in the industry think landings will be significantly below 100 million pounds for the first time in nine years.

The silver lining of the pandemic for the New England industry, and for seafood producers across the country, has been the increase in seafood consumption, even

accounting for losses in restaurant sales.

According to recent figures from the National Fisheries Institute’s Global Seafood Marketing Conference, in 2019, seafood sales were split 50/50 between retail and foodservice or restaurants.

This has been true for decades.

In 2020, for frozen seafood, the foodservice share fell to 36%, while the retail share grew to 64%. In dollar terms, retail grew 37% while foodservice declined 24%. The result was a net gain in overall sales across the entire seafood category of around 8%.

Lobster landings were worth $684.3 million

FIGURE 1. HARD SHELL 1 1/4LB LOBSTER WHOLESALE PRICE, FOB BOSTON 2018-2020

in 2018. Approximately

UB LOBSTER, AMERICAN HARD, 1 1/4LBS. QUARTERS, FOB NEW ENGLAND

90% are landed in Maine,

13 12

with 7 or 8% landed in From May through the first half of August, wholesale lobster prices fell up to 46% below the 5-year average. Prices recovered in the second half of 2020 due to lower than expected landings and higher than expected demand. This outcome was not foreseen last spring, when many lobster

10

USD/LB

Massachusetts.

11

9 8 7 6 5 4

Mar 2018

Aug 2018

Feb 2019

Jul 2019

Jan 2020

Jun 2020

Dec 2020

Source: Urner Barry 18

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FIGURE 2. STATE OF MAINE AMERICAN LOBSTER LANDINGS *2019 DATA PRELIMINARY* 140

$600 $550

POUNDS (MILLIONS)*

120

$500

VALUE (MILLIONS) $450 100

$350

80

$300 60

$250 $200

MILLIONS OF DOLLARS

MILLIONS OF POUNDS

$400

40 $150 $100

20

$50 0

$0

1950

1954

1958

1962

1966

1970

1974

1978

1982

1986

1990

1994

1998

2002

2006

2010

2014

2018

YEAR

Source: Maine Department of Marine Resources

One of retail seafood’s biggest winners was lobster, where retail sales soared 87% based on Nielsen IRI data. This dramatic shift in demand explains why lobster prices recovered to more normal levels in the second half of 2020.

But the industry faces monumental environmental challenges.

The lobster fishery has been strongly impacted by global warming.

Oceanographic features mean the Gulf of Maine has been warming faster than practically any other ocean area on earth. The lobster population has been moving north, as they seek colder waters.

The nine years of over 100 million-pound landings in Maine came about as more lobsters moved into areas open to fishing.

Meanwhile, landings along the southern coast of New England and in Long Island Sound have declined.

There is no guarantee that lobsters will stop moving. Maine could experience a decline in landings as a greater portion of lobsters migrates to Canadian waters in the coming years. The recent declines may be a harbinger of this, but it is too soon for firm conclusions.

The lobster industry in Maine also faces another problem due to climate change: Increased interactions with the critically endangered North Atlantic right whale.

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There are only about 400 remaining North Atlantic right whales. Since 2017, the National Oceanic and Atmospheric Administration (NOAA) estimates about 40 have died. While climate change may be the species’ greatest threat, the most visible causes of mortality are ship strikes and fishing gear entanglement. The added weight of lines and traps weakens the whale and, in some cases, leads to starvation. Aerial surveillance shows approximately 25% of the population gets entanglement scars each year.

In an attempt to reduce these entanglements, Maine fishermen have adopted weaker breakaway lines, and recently began using a marking system to identify any gear from Maine seen in an entanglement. But the large scale of the Maine lobster fishery requires that it be part of the primary solution for protecting right whales.

More regulation may be coming: A lawsuit brought by environmental groups in the spring of 2020 successfully argued that NOAA, the federal agency that regulates fishing, has failed to sufficiently protect the whales. NOAA regulations require fisheries not to cause additional mortality to endangered species.

2021 INSIGHTS AND PERSPECTIVES

The lobster industry may not have many choices in responding to this crisis. The Marine Stewardship Council (MSC), a nonprofit which certifies seafood as sustainable, suspended its certification for Maine lobster after the lawsuit, but not for Canadian lobster. Many retailers require their suppliers to either be MSC certified, or to have some equivalent protection plan in place. Without an acceptable way forward, the Maine industry may be at a disadvantage in the retail marketplace, especially as Canadian suppliers could continue to meet demand.

Maine fishermen argue that they are not the primary cause of the right whale problem yet are being asked to bear the greatest costs for mitigation.

Other New England fisheries experienced much the same roller coaster as the lobster fishery this past year.

Scallopers, whose products are also highly dependent on foodservice, initially saw lower prices which have since recovered. Scallops are the fourth most valuable fishery in the U.S. and have made New Bedford Massachusetts consistently the highest value port in the nation.

Fresh seafood also had distribution hiccups. However, the overall increase in demand for seafood was a rising tide that has helped most of the industry.

The one sector substantially left behind has been shellfish aquaculture. In Massachusetts, which harvests around 50 million farmed oysters per year, the State’s Division of Marine Fisheries says that between May and October, sales were down 43%. Many unharvested oysters have grown too large for their normal markets, further losing value, and acting as a drag on farmers ability to restock next year.

Oysters have not been able to make the jump to retail seafood because shucking an oyster is simply not a skill that many Americans can master. The industry boomed on a surge in oyster bars, as young people embraced oysters more than most other seafood. But this all took place in the social context of bars and restaurants and did not transfer to home consumption. The pandemic will undoubtedly drive a significant number of small oyster farms out of business, which is likely to be a longerterm consequence for the New England aquaculture industry.

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2021

OUTLOOK FOR THE

Green Industry It didn’t take long after releasing last year’s green industry outlook for the predictions to be sidetracked by COVID-19. The COVID-19 pandemic left a wake throughout the

business community that is still being wrestled with today, with some industries being COVID winners and others COVID losers. It just happened that the circumstances

played out favorably for the green industry for several reasons, but not without a few hiccups along the way.

DR . CHARLIE HALL T E X AS A&M UNIVER S I TY

Early in the spring season when COVID-19 first hit, decisions were being made across the country as to which businesses were going to remain open in the face of the pandemic; in other words, which businesses were essential. In most states, green industry firms ended up being considered essential, causing many firms to breath a collective sigh of relief. But this was not the case in all areas of the country and those firms that were not deemed essential early on (but eventually were), found themselves playing catch-up to capture as much of the missed time as possible.

There was also an early advantage for green industry growers that grew for the box store market. Since box stores like Home Depot, Lowes, Walmart, Menards, etc. were all open during the pandemic, consumers were able to access plants and other lawn and garden products without interruption. Independent lawn and garden retailers (garden centers) thought the worst was going to happen in that they would not be deemed essential and their box store competitors would steal the entire spring 2020 season. But they recuperated nicely after the slow start and ended the year with double-digit comps (YOY sales).

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2021 INSIGHTS AND PERSPECTIVES

21

More time at home led to increased home improvement spending and this included landscaping their yards and decorating the interior of their homes with plants.

This above-average performance of the lawn and garden retail sector was brought about by the “staycation effect” promulgated by folks working from home during shelter-in-place restrictions.

More time at home led to increased home improvement spending and this included landscaping their yards and decorating the interior of their homes with plants. It is estimated that several million new lawn and garden consumers were created during this increased time at home. Retailers thus experienced increases in their gross sales that resulted from the increased store traffic count and the increased dollars per average ticket.

But retailers had to work hard for those dollars because COVID-19 created many challenges for handling face-to-face sales. Retailers had to be creative with social distancing measures and remote (curbside) pickup procedures. The same could be said of all firms, up and down the supply chain, in the green industry.

Interestingly, landscape firms were one of the few service-related industries that were not only able to stay open (being outside

22

aided in social distancing requirements) but experienced the same shot-in-the-arm from more people being at home and wanting to improve the aesthetics of their surroundings. Landscape sales were up YOY, with many landscapers experiencing a backlog of several months’ worth of projects because they simply couldn’t keep up with demand.

Growers in the industry also experienced a very good year in 2020, for the most part. My own benchmarking efforts across the grower sector revealed that about 75% of growers experienced sales increases ranging from 5% to 25%, while the remaining 25% of growers were down YOY from the sales they had in 2019.

These growers also experienced much lower shrink than normal since many retailers were scrambling to find enough product to sell during the extended spring season in June and July. Thus, growers were able to sell most, if not all, of their available inventory.

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On the flip side, many of the growers that were down YOY were either located in states where all firms were shut down (e.g., Michigan), or their retail or landscape customers were shut down, or they were selling into markets where there was substantial slowdown because of the economic downturn (e.g., green infrastructure projects, conservation projects, etc.).

All of this trickled down to a good year for the allied trade sector as well. There were fewer delinquent accounts payable than they had experienced historically at the close of the season and many have expressed that pre-bookings for the 2021 season are higher than they have been since the great recession (particularly for young plants like tissue culture, plugs and cuttings). However, going into 2021, it is anticipated that input costs will be 2-3% higher due to trade war effects and other inflationary pressures resulting from higher commodity prices.

Going into 2021, the economy is still suffering under the weight of COVID-19. While some vaccines are already released, states have experienced many challenges in distributing and administering them. In the meantime, the number of cases, hospitalizations and deaths continue. This continues to be disconcerting because I have said more than once over the last year that the “shape of the economic recovery is correlated with the shape of the COVID-19 curve.”

That being said, if folks continue to stay at home more in the 2021 spring season, there is at least the opportunity for them to spend more again this year on plants and other lawn and garden

NORTHEAST AGRICULTURE

2021 INSIGHTS AND PERSPECTIVES

products. The litmus test for the retail sector is whether or not the new lawn and garden consumers will come back for more this year. If they serviced them appropriately and made them successful last year, then that will likely happen. Time will tell.

If the weather cooperates, the stage is set for another good year across the green industry. The housing sector is still performing well (though I am keeping my eye on it since prices are above where they were before the bubble burst during the great recession). Most of the lawn and garden consumers are in the mid-to-upper income level category and that category has mostly recovered from any COVID-19 job losses. Further stimulus payments will also bolster consumer spending. Will we see the same YOY percentage increases of 2020? Not likely, but I am advising firms to plan on a 5-10% increase and any more than that is icing on the proverbial cake. From the banking perspective, firms are entering 2021 in a much better working capital position than I have seen in decades.

23

t s a e h t r o N

FOREST PRODUCTS INDUSTRY REVIEW & OUTLOOK Volatility in both consumption and pricing defined North American wood products markets in 2020. As pandemic-related lockdowns brought the economy to a halt in March, mills cut production from 10 to as high as 50 percent, in some cases.

Lockdowns hit pulp markets hard, reshaped by new trends in paper products. Most notably, the pandemic accelerated the decline of graphic paper consumption. The economic contraction led to a rapid shift toward electronic media, fewer paper advertisements, and a decrease in mail volume. However, more time spent at home caused demand to surge for tissue and hygienic products. Similarly, increased e-commerce has elevated paperboard and packaging consumption.

On the softwood lumber side, government stimulus and a precipitous decline in interest rates left many Americans with cash on hand. Stuck at home, homeowners’ expenditures on residential improvements surged. That, coupled with the inclusion of construction as “essential work,” led to a massive increase in demand for wood products. With production already cut and mills hesitant to rapidly restart, dealer inventory plunged to record lows and prices skyrocketed. Production was slow to resume, and COVID-related labor restraints prolonged the shortage, thereby keeping prices elevated.

PAUL J ANNKE FO R E ST ECONOMIC AD VI S O RS

Still, the residential construction sector has outperformed the rest of the U.S. economy by a wide margin since the pandemic erupted in the spring, and it is expected to continue to do so over the next few years.

PULP OUTLOOK

Consumption levels for graphic paper are unlikely to return, much like the 2009 recession when consumption dropped 18.4%. Demand for household tissues and hygienic products are expected to decline from their peak during lockdowns, but they are likely to remain elevated in the near term. Paperboard and packaging will remain more robust, trending higher in the near term.

24

FARMCREDITEAST.COM

Our current forecast shows paper consumption dropping to 24 million tons (18%) and slipping lower to 23.7 million tons in 2025 despite a recovering economy. In the long term, consumption is expected to continue to fall, albeit at a lower rate.

inventories are at record lows, and production will continue to be hampered by fiber supply shortages. As a result, we expect prices will be flat to higher in 2021.

add on to a home to bring it up to more modern standards. This is especially true given the high level of equity homeowners currently have.

With end-use market activity remaining strong, we expect domestic consumption will grow 4% per year in 2021−22.

While we expect high prices in 2022 relative to historical levels, they will fall. The decline is not because of weak demand, rather, we assume mills will increase production to meet rising demand and take advantage of high profitability.

With production remaining more in line with demand in 2021, prices will fall back toward more “normal” profit levels.

Conversely, paperboard and packaging production will trend higher over the long term. Despite falling 3.8% in 2020, demand will push upward to 47.4 million tons by 2025. Production is expected to track consumption patterns, increasing nearly 53.4 million tons by 2025, or 8.7% above 2020’s level.

Meanwhile, production will have difficulty keeping up with demand in 2021 as fiber-supply constraints in British Columbia and the U.S. West Coast combine with a lack of residual markets in Eastern Canada to limit potential production growth in regions other than the Southern U.S. Recent investment in new Southern capacity will bolster North American production, but it will not be enough to meet demand.

Residential construction accounts for 70−75% of U.S. softwood lumber consumption. The two main components of residential construction are new construction and residential-improvement expenditures.

In the Northeast, pulp production challenges—including labor challenges due to COVID-19—have been exacerbated by the loss of Pixelle’s mill in Jay, Maine. The mill’s digester exploded in April 2020, and the company has announced that it will not rebuild the pulp mill and will permanently idle one of the facility’s paper machines. The other two paper machines will continue to operate using pulp sourced from other pulp mills.

The mill represented roughly 20% of Maine’s operational pulp capacity.

Finally, dealer stocks are at historically low levels. Over the past 20 years, stocks have ranged from a low of 1.12 months’ supply to a high of 2.57 months’ supply.

Currently, stocks are a little over half (0.63) a month’s supply. We expect dealer stocks will remain low in 2021 as mill production struggles to meet the anticipated rise in demand. Increased production in 2022 as new Southern mills become operational should allow dealers to rebuild their stocks to more “normal” levels.

We expect new home construction will be strong in 2021−22. There are a number of reasons for this, including historically low interest rates, decent income growth (especially among potential home buyers), strong demographic tailwinds due to a population bulge just now entering their prime home-buying years, high pent-up demand after a decade of underbuilding, and a low inventory of homes for sale.

Nationally, pulp production continues to fall. Production is expected to decline 8.5% in 2020, then recover over the next two years before it plateaus near 50 million tons. Weaker consumption of paper and expanding capacity in the Southern Hemisphere will limit production.

In addition, residential-improvement expenditures will remain strong. The average age of the housing stock in the U.S. is 42 years and the average home size of the U.S. housing stock is 1,700 square feet, while the average new home size is nearly 2,500 square feet. The older stock relative to newer homes provides significant incentive to improve and/or

SOFTWOOD LUMBER OUTLOOK

Lumber prices will remain high in 2021−22. Demand will be strong,

With demand remaining strong, production having difficulty meeting demand and inventories low, we expect softwood lumber prices will remain elevated relative to history.

EASTERN SPF 2X4 2&BTR., BOSTON

1,000

800

600

400

200

0

10 NORTHEAST AGRICULTURE

11

12

13

14

15

2021 INSIGHTS AND PERSPECTIVES

16

17

18

19

20

21

22

Source: FEA. © 2021 Forest Economic Advisors

USD/THOUSAND BOARD FEET

1,200

25

NOTES

26

FARMCREDITEAST.COM

NOTES

NORTHEAST AGRICULTURE

2021 INSIGHTS AND PERSPECTIVES

27

NOTES

28

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The views and opinions expressed in this publication are those of the original authors and do not necessarily reflect those of Farm Credit East. The information provided in this report is not intended to be investment, tax or legal advice and should not be relied upon by recipients for such purposes. Farm Credit East does not make any representation or warranty regarding the content, and disclaims any responsibility for the information, materials, third-party opinions and data included in this report. In no event will Farm Credit East be liable for any decision made or actions taken by any person or persons relying on the information contained in this report. Links to third party websites are provided for informational purposes only. Farm Credit East does not necessarily endorse or support the content of such third party sites.

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