Commodity Prices Remain High

U.S. commodity prices remain high despite reports that farmers are planning their largest commodity crop in recent history.

The past several years have been good for American farmers. Land values, crop prices, and farm incomes are at record highs. Increased demand for major American commodities, both domestically and internationally, and dwindling supplies have increased prices. The high prices have sparked an increase in commodity planting, with some farmers abandoning Conservation Reserve contracts in order to free up more land for commodity crops.

Farmers are planning to plant nearly 96 million acres of corn, significantly higher than analyst expectations of 94 million acres. That number is the highest corn acreage since 1937. Overall acreage of the eight major commodity crops is expected to increase 1.7 percent, the highest since 1998.

Despite increased plantings, crop prices are expected to remain high. Demand remains high thanks to increased ethanol production and major soybean crop failures in South America. In addition, increased demand and consumption have decreased commodity supplies in the U.S. Corn stockpiles, for example, fell by eight percent from last year.

As spring planting seasons rapidly approach, farmers are looking at weather forecasts. “Going forward, it’s going to be all about the planting weather,” said the president of U.S. Commodities. The warm, mild winter are expected to be beneficial to many farmers, allowing them to expand planting windows and increase harvests.

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Written by: Justin Ellison / Farm Plus Staff Writer