1-2 FB Commodity Drop

1-2 FB Commodity Drop

 2011 was a year for record crop prices, however one expert believes a correction could be in store for 2012.  The University of Illinois recently held a series of Farm Economic Summits to give the nation’s producers and agri-business people an outlook for the 2012 year.  Professor Emeritus Darrel Good believes the record prices of 2011 are behind us, and, relevant to Idaho corn producers, corn prices are due to return closer to their long term averages. “Basically what we are seeing is some concern about general economic weakness in the US and the rest of the world, obviously some financial problems in Europe perhaps providing a weaker overview for the demand side of the crop market next year. On the supply side talking about the potential for a return to  a more normal crop next year which would be a fairly large increase from what we had in 2011, from corn perhaps pointing to lower prices for the year ahead certainly than what we’ve experienced here in 2011.”

 So what are those long term averages for corn?  Good explains he’s conducted a study of commodity prices, and came up with some interesting findings. “We know that we have had relatively high prices in 2011 and the messages, don’t expect those to be normal or average prices moving forward, if you’re thinking long-term 4 ½ dollar corn, that is a more reasonable price to use  in investment decisions.

 

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