Posted on 02/17/2011 5:17:06 AM PST by NRG1973
The seeds of a sustained increase in food prices are about to be sown in Mississippi, Nebraska and other farm-belt states across the U.S.
As American farmers prepare to plant their next crops, they must decide how much, and what, to plant.
With prices for everything from corn to cotton and soybeans soaring, the overall mix of production is likely to be similar to last year, instead of a major turn toward one hot crop, a move that would likely drive down the price of that crop.
In past years there have been some big acreage swings, but analysts expect mostly minor changes when the U.S. Department of Agriculture releases a closely watched survey of farmers' intentions next month. Only a limited amount of idle land can be brought into production, further capping supply.
That could help extend the commodities rally, which has already seen corn futures jump 92% over the past year, soybeans rise 44%, wheat gain 69% and cotton soar 162%.
With worries rising about the world's food supply, planting decisions are critical. The U.S. provides more than half of global corn exports and over 40% of soybean exports.
(Excerpt) Read more at online.wsj.com ...
In reality lost purchasing power is going to be a bigger issue in the 2012 election than unemployment because it affects employed people as well as retirees and the unemployed.
Cotton is over $2.00 a pound this morning. In July 2010 cotton was $.70 per pound.
Buy your cotton clothing now before the price doubles.
Farm Program Pays $1.3 Billion to People Who Don’t Farm
http://www.washingtonpost.com/wp-dyn/content/article/2006/07/01/AR2006070100962.html
Phooey!
“They” are attempting to manipulate a food bubble.
Wait until electricity triples in price and gasoline is $7.00 a gallon.
And, as is usually the case, the American farmer will plant and harvest sufficient so that there will be large surpluses. That's what they do.
Depends on what QE we are on, and how many tanker loads of ink the fed has.
teh elephant in the living room: How much of our crops are going into that costly environmental failure -Ethanol?
Save the Rainforest, kill the people.
There are two wild cards in all of this.
The first is the US winter wheat crop. The big freeze put it at risk, and I still haven’t seen any estimates for it. The bigger this crop, the better for everybody.
Second is that the US national fertilizer slurry pipeline, which transfers vast amounts of petroleum based fertilizer around the Midwest, is both in less than ideal maintenance condition, and it is too small for the vast amounts of fertilizer that agribusiness needs.
Natural gas accounts for 70-90 percent of the production cost of nitrogen fertilizer ammonia. Thus, when U.S. natural gas prices increased significantly beginning in the year 2000, the cost of domestically produced ammonia also rose significantly. Average U.S. ammonia production costs doubled from 1999 to 2003, the latest year for which data are available.
As a result of high natural gas prices, 21 nitrogen fertilizer (ammonia) production facilities have closed since FY1998/99 (July 1998-June 1999). Sixteen of those plants have closed permanently, representing a 20 percent drop in total production capacity, while five plants remain idle. Operating rates for the U.S. ammonia industry have also declined significantly from historical levels.
I really value the informational posts people like you contribute to this forum. We get a lot of emotional response with little specific information. Thank you.
Temporarily, perhaps. But historically the American farmer has ALWAYS overproduced sufficiently to drive prices down, even in the face of seeming insurmountable demand.
Yes, what’s the old saying, nothing cures a high price like a high price. Producers will produce more to capture the higher prices before consumers cut back, then the prices will drop as demand decreases. It all works as long as there is some elasticity in supply and demand, and minimal “tinkering” by non-market forces. At least that’s the theory as I learned it.
I think with farmers, it's more a case of overproducing demand requirements, and the price falling as a result.
Same as currently going on with natural gas as the shale gas finds its way into the market. Demand certainly hasn't dropped, but supply has gone up.
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