Bounce-Back in Commodity Prices May Take Longer Than Expected
Farmers hoping for a jump in commodity prices shouldn’t expect one any time soon.
That is, according to FCC Chief Agricultural Economist J.P. Gervais, who attended the Agriculture and Applied Economics Association conference recently held in Boston.
Gervais says his main takeaway from the conference was to expect tighter margins across most sectors.
He notes the demand for corn may be growing, but the potential record U.S. crop and increased world-wide production means prices will likely trend lower than they are now.
The economist feels soybeans may be the exception to the rule.
Gervais points to reforms in Argentina and cash flow constraints in Brazil as reasons to expect decent supporting prices next year.
He found mixed opinions at conference on where wheat is going.
The main consensus was a large supply means prices will likely be based on the demand for future exports.
Gervais concludes it could be dangerous to build long-term business plans on the hope that agricultural prices will climb.