Outlook Positive for Farmers as Commodity Prices Remain High
Farmers across the United States are heading to the fields to plant crops at a time when commodity prices are rising as global demand surges. Many farmers are hopeful this year’s crop could be one of the best on record.
Farmer Monty Whipple is several weeks behind schedule. Rain and cold temperatures delayed plans to start planting in the middle of April. But Whipple is making progress, thanks to a heat wave in the Midwest state of Illinois.
“If we get all this corn planted here in the next week or so, I’m not too concerned about it,” Whipple explained.
Whipple is planting corn at a time when demand for his product is strong. While demand is up, so is the cost of doing business.
“All commodity prices are high,” he added. “Cotton is exceptionally high. Commodities such as oil obviously, exceptionally high, all the talk about high fuel costs and gasoline costs and so on.”
Farming is a family tradition for Whipple. He tends to fields once harvested by his father and uncle. The farmer says when they lived off the land the demand for their goods was primarily domestic. But in a global economy, the business of farming has changed.
“It’s no longer a U.S. economy, or U.S. demand,” Whipple noted. “It’s a worldwide demand, and as we’ve seen over and over again, partially because of our own doing by buying Chinese products, by buying products made in Vietnam and India – foreign countries – Korea, we’re making their middle class, so called, more affluent.”
That new, affluent middle class Whipple refers to is fueling the demand for his crop.
“For the last three years, world consumption has outpaced world production,” noted Matthew Pierce who watches commodity prices for GrainAnalyst.com. “We now need to take a look at the changing diet of the world, specifically China and India once again, and look at how are we going to gain more acres either in the United States, Brazil or Argentina. Those are the only three countries that can truly produce and produce at a consistent rate where the world can count on it.”
Pierce says until that acreage is identified, demand for corn, wheat, and soybeans from U.S. farmers should remain high. And that translates into more money when it comes time to sell the commodities, particularly this year.
“Farmers domestically in the United States should see one of the banner years they’ve had in their entire career,” added Pierce. “We have strong basis, we have incredible demand, and we have acreage right now that offers nothing but upside incentive for the farmers.”
As Monty Whipple looks to the future, when his crops head to market, he is mindful of the past. He says he isn’t taking the high prices for granted.
“The first thing that goes through your mind when you are out planting is, you know, am I doing the best job I can to get the most out of this crop,” said Whipple. “I mean every year is different. Just because you had a great year last year, there are so many unknowns every year in farming.”
What is known is that corn, soybean, and wheat prices are high. But the great unknown every farmer faces – and in some cases can dread – is the weather, and whether or not there is an abundant crop to harvest in the fall.