Carolina Farmers have Potential to Cash In on Midwestern Drought

The Midwest, often termed as the breadbasket of America, continues to bake under unseasonably hot and dry conditions, pushing commodity markets to record highs. Conversely, Carolina farmers are sitting on good crops with adequate moisture, and if conditions continue, eastern producers should be able to cash in on the weather woes of the central part of the country. Herb Vanderberry, Public Policy Analyst with North Carolina Farm Bureau:

“The market will react a little sooner than everyone else to try and guess what is going on. You can follow the futures prices to tell you a little bit about what the market is guessing.”
 

Vanderberry notes that USDA will begin surveying farmers across the country this week to compile the pivotal August crop progress/supply demand report. Until that report is released, the markets will function on weather, and educated conjecture based on the weekly reports:
 

“USDA has come out in their July supply and demand report with a national corn crop 28 bushels per acre lower than the June report. The statistics service is conducting surveys at the end of July for the August crop production report that will be released that second week in August. That will be the first survey based report. Those reports will tell the size of the crop and where its heading, and have a lot to do with future prices.”
 

As far as Carolina farmers cashing in on high futures prices, Vanderberry says the secret lies in the crop’s potential:
 

“We are going into this 2012 crop year with acreages planted of all of our major field crops, we planted a record amount of wheat this year in NC. We had been set up for the potential for very good sized crops. But we are uncertain of what the yield potential will be. Based on the latest crop condition information looks like our corn and soybean crops are faring better than those in the Midwest. We are keeping our fingers crossed that we continue to get the rain that we need.”
 

Cotton futures have plummeted recently due to a lack of demand. Vanderberry explains that recently cotton futures have been pulled up by corn and beans:
 

“Our cotton acreage going into 2012 was about 550,000 acres in NC, a bit lower than where we were in 2011. There is no doubt that with the pressure that is on corn and bean prices from the drought in the Midwest that southeastern cotton producers are already measuring their crop plans for next year.”
 


SFNToday.com is dedicated to serving the agricultural industry in the Carolinas and Virginia with the latest ag news, exclusive regional weather station readings, and key crop market information. The website is a companion of the Southern Farm Network, provider of daily agricultural radio programming to the Carolinas since 1974. SFNToday.com presents radio programs, interviews and news relevant to crop and livestock production and research throughout the mid-Atlantic agricultural community.

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