A new price standard?

Farm and Ranch August 15, 2011 The USDA is forecasting strong if not record prices for some commodities into next year? Are the higher commodity prices we are seeing going to be a new standard? USDA Outlook Board Chairman Gerry Bange has an answer to that question.

Bange: “I think the truth of the matter is we are in a different plane in regard to some of these prices now than we have been in the past. We don‘t expect to see, it is hard to imagine a scenario where we would see corn prices going back to $2 and $3 which used to be the norm a few years ago. Same thing with regard to wheat, soybeans and other commodities.”

Jack Scoville, Vice President of Price Futures Group in Chicago, says if U.S. prices move up too much buyers will turn to other suppliers if possible, but he does think wheat, corn and bean futures prices can go somewhat higher from current levels.

Scoville: “Once we get there it is going to be very, very hard to stay there. I look for firm markets for corn, soybeans and wheat all through the next year with corn and soybeans leading the wheat along here a little bit with the numbers USDA is putting out. I don‘t see why $8 or $8.50 in Chicago wheat, something above that in Minneapolis wheat and $8 corn is not possible.”

As for the new price plateau? You have to go back to mid-2006 to find the last time the average monthly price of all wheat at Portland was below $4 a bushel.

I’m Bob Hoff and that’s the Northwest Farm and Ranch Report on Northwest Aginfo Net.

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