Beef farmers face a big challenge again this year.Ottawa—Farm Credit Canada has an upbeat 2021 farm income forecast building on strong 2020 results for many sectors along with a few risks and head winds in some commodities.As part of the 8.1 per cent increase in farm cash receipts last year to $71.7 billion, total crop receipts rose by 10.2 per cent to $41.9 billion. It was more difficult in the livestock sector as receipts declined 0.8 per cent to $26.4 billion. Chicken, hogs and dairy recorded small gains but beef dropped 4.9 per cent and turkey 4.2 per cent.“Production estimates from Agriculture Canada point toward lowerproduction in 2021 for most crops except for barley, canola and soybeans, for which acreages are expected to increase. Futures signal strong prices for 2021, although they should decline following the harvest of the new crop.”While FCC expects higher crop prices this year, it cautions about a downside price risk. “Crop prices have been volatile lately and supported by strong import demand from China, which should not be taken for granted in today's geopolitical climate.”Last year was brutal for beef farmers because of restaurant closures and temporary closures of packinghouses. “Market signals point toward receipts moving sideways in 2021. As of Jan. 1, the number of beef cows was down 0.4 per cent year-over-year, and the number of calves under 1 year was down 1 per cent year-over-year. Cattle weights were up in 2020, but we expect a return toward more normal weights in 2021.“Taking these data into consideration, we forecast small declines in the volume of calves and cattle marketed in 2021. Futures do not point toward a price recovery in 2021. Overall, we forecast total receipts for the cattle industry to stay near their 2020 level.”Hog producers have a more encouraging outlook with 2021 “set to be a lot better to hog producers from a revenue standpoint. “Total hog inventory and the size of the breeding stock declined marginally from last year. Nonetheless, we expect strong prices to support a 3.4 per cent growth in production.”There should be an average hog price of 27.7 per cent over last year and hog receipts should increase by 32 per cent to a record $6.2 billion. “This forecast comes with the downside risk that China could reduce its pork imports, lowering hog prices in North America.”Dairy receipts grew by 2 per cent last year and the 2021 outlooking “is promising as the demand for milk remains strong. We forecast receipts to grow by 6 per cent in 2021 – a rather strong growth rate for the dairy sector.”In the forecast, FCC recommends attention be paid to the Canada-US exchange rate, which is currently at a two-year high. The continued strength of the Canadian dollar could weaken farm cash prospects for 2021.Alex Binkley is a freelance journalist and writes for domestic and international publications about agriculture, food and transportation issues. He's also the author of two science fiction novels with more in the works.