Projecting Crop Futures Depends on the Weather
Winter wheat is going in the ground, and with high prices, acreage in the Carolinas has been projected into record high territory. But, will those prices last? American Farm Bureau Federation’s Chief Economist discusses that possibility:
“I could make a case for that to happen but I wouldn’t be at all surprised to see a little pressure on wheat prices. Of all the grains we have out there it is probably the most abundant in supply. One of the things that is propping up wheat prices are the relative prices of corn and other feed grains. As soon as we see a break in corn prices, I think we will see wheat prices fall.
If in any year, given the levels of production and acreage that we are talking about, any time we get normal weather, we are probably going to talk about corn prices with a 3 or 4 in front of them. Any time we get a short crop, and it wont even take something like 2012, we are going to see corn prices with a 7 or 8 in front. It will be up or down, but not in between.
We had the expectation all the way up through the first week of June, it took really recognizing the drought for prices to take off. We will be in that same mode this coming year, except that we have very low sub soil moisture at this point in time so unless we get some good snows during the winter we will be very vulnerable come spring.”
We’ll be talking further with AFBF’s Chief Economist Bob Young about crop prices and other things effecting Carolina agriculture later this week.