Rising energy prices should have an impact on global GDP growth in 2021, though the ratio has been declining. Over the past 20 years, expenditures on energy and global GDP have an R2 of 0.873, but the share of energy to GDP has been declining. Splitting the two attributes on separate axis in the graph below enables a display but distorts this relationship. Due to the pandemic, energy costs fell by over 19 percent last year and GDP slipped from its long-run annual growth rate of 4.82 percent to just 1.6 percent. In 2021, global GDP growth will advance by 7.46 percent, but energy costs will rise by 25 percent. Higher energy costs will reduce potential GDP but represents just 7.8 percent of GDP. Instead, there will be substitutions as h...
What You Need to Know Today: Commodities were mostly lower across the board today after yesterday’s Federal Reserve meeting hinted at a potential interest rate hike later in 2026. The dollar index reached its highest level in over a year, and a strong dollar makes U.S. agricultural expor...
Tomorrow is the Juneteenth federal holiday, and the USDA, along with the rest of the federal government and the CME, will be closed, so the monthly Cattle on Feed report was released a day early. The total number of cattle on feed in feedlots with 1,000 head or more capacity on 1 June amounted...
From WPI Consulting
Communicating importance of value-added products
Facing increasing pressure to quantify the value of export promotion efforts to investors, a U.S. industry organization retained WPI to develop a quantitative model that better communicated the importance of exports. The resulting model concluded that value-added meat exports contributed $0.45 cents per bushel to the price of corn, increasing support for that sector’s financial support of WPI’s client. In addition to serving the red meat industry with this type of analysis, WPI has generated similar deliverables for the U.S. soybean and poultry/egg industries.