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SMF Blogs > October 2008
Glory days fade for U.S. farmers

Glory days fade for U.S. farmers


WSJ reports the Farm Belt, one of the hottest parts of the U.S. economy in recent years, is rapidly cooling. The Midwest faces plunging crop prices and stubbornly high production costs. Corn prices have dropped from $7.54 a bushel around July Fourth in central Iowa to just $3.81 a bushel on Tuesday. But growers are hearing from suppliers that fertilizer and seed costs could rise by more than 40% each for next spring's plantings.

Some farmers are postponing equipment purchases and considering whether to plant less of such high-cost crops as corn come spring.

Stock prices of agricultural companies have plummeted. Many Midwest farmers worry that the combination of lower crop prices and high costs will usher to an end, by next year, one of the most flush periods in American farm history.

Farmers fear a big drop in next year's profits. Most economists figure the Farm Belt can weather a slowdown, partly because farmer balance sheets are strong, and partly because federal mandates will increase the amount of corn consumed to make ethanol fuel next year. Also, economists think global demand for U.S. crops will remain robust despite recent economic troubles.

Still, U.S. growers clearly face a riskier, more volatile environment in which to make bets on what to grow and how much. (Stocks mentioned: BG, ADM)
Posted: 10/22/2008 8:34:41 AM by Global Administrator | with 0 comments


USDA issues weekly crop progress planting report

USDA issues weekly crop progress planting report


USDA released its weekly crop progress report for the week ended Oct 12th, which provides data for the fourth week of how much corn we have harvested vs last week and vs last year and the USDA's figures show that we remain well behind.

Corn harvest was reported at 21%, vs 14% in the last week, vs 50% in the prior year and vs the 5-yr avg of 41%. Soybeans harvested was reported at 51%, vs 31% last week, vs 61% in the prior year and vs the 5-yr avg of 61%. Also in the report that is very important is the condition of the current corn crop: 15% of the corn is in excellent shape (14% last week), 47% good (47% last week), 25% fair (26% last week), 9% poor (9% last week) and 4% very poor (4% last week).

This compares to the prior year of 19% excellent, 46% good, 23% fair, 8% poor, and 4% very poor. This week, corn that is in excellent to good condition is 63%, higher from last weeks; 62%, and the prior year of 65%... In soybeans: 12% of the soybeans are in excellent shape (12% last week), 45% good (45% last week), 29% fair (29% last week), 10% poor (10% last week) and 4% very poor (4% last week).

This week, soybeans that are in excellent to good condition are 57% vs the prior week of 57%... Other important figures include the corn crop maturity, which remains behind. This will likely remain behind, boosting frost risk, which is bullish for corn prices. Corn matured is at 86% vs last week's 73%, the prior year of 97% and vs the 5-yr avg of 95%.

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Posted: 10/14/2008 9:12:45 PM by Global Administrator | with 0 comments


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