grain prices again

[rambler]

Lotta things going on in the world that might affect grain prices over the next 6 months.

Those who are self-sufficient can sit back smugly.

Those of you who buy a lot of feed or food, might want to keep your feelers out as to what is happening.

With the poor world ecconomies and Funds (investors) re-aligning their investments in the next couple weeks, there is a good case for grain prices to drop quite a bit. They have really gone up the past couple months, if you haven't been paying attention....

But: There is a lot of thought that China is going to start buying corn this late spring. Once (if) that starts, it will really change how people feel about grain demand....

One of those weather cycle deals is going on in the South Pasific, that makes it real dry in Argentina, and kinda wet & ugly in other parts of the grain growing world. That can scare grain buyers into raising prices a lot.

The USA has QE2 policy, which is to stimulate our ecconomy by printing money. This has a side effect of making our grains look real cheap to other countries, esp the Pasific Rim countries, even if _we_ think our grain is high-prices, the QE2 effects make our grains cheaper for them to buy. There is a lot of demand for USA grains for a change because of our dollar value.

Some 'experts' think we need to raise 9 million more acres of grains in the USA than last year to keep everybody happy who wants grain for 2012 needs. Come about March, such talk can _drastically_ distort grain prices, with people offering outragious prices for grain just to get farmers to plant more of that crop - which _actually_ makes the crop cheaper once harvest comes around, but it makes 'crazy stupid' prices appear in spring. That is what happened to wheat a few years ago, when the price of wheat was $20 a bushel... (Now actually, very very little wheat was ever bought or sold at that price - it was all a bidding war to increase acres planted, but it sure affected bread prices and so forth as middle men proffited from the games... But it's a good game in the end, as it prevents shortages from occuring, and keeps grain supplies constant and available - wheat quickly went to near $4 a bu again because of the games....)

Currently corn is close to $6, and soybeans close to $13 a bu in Chicago trading - us farmers get less than that of course.

Some experts think it is possible for those numbers to go to $12 for corn, $20 for soybeans briefly at some point this spring.

Again, this would not be real money farmers would see; it would be a game to increase the number of acres planted world-wide. It would actually make grains pretty cheap a year from then, as farmers around the world kick in production....

'Something' could happen to make grains go down in price, world events, government actions, colapsing governments in Europe, etc. While those lower grain prices would be welcome by many today; it could set up supply problems in a year or 2, as farmers across the globe don't work hard to make grain if it isn't worth anything....


So, what does any of my babbling mean?

It's possible for grain to go all goofy/ crazy prices this spring. It could be a bad time to need to buy a lot of feed/food. Folks will get all worked up if it happens.

In the long run, it would be a _good_ thing, as it is simply a teeter todder keeping our grain supplies in balance, plenty available, and cheaper next year & the following year.... But in the short term, it will really spook people, and there will be stupid crazy prices on feed, and just a lot of uncertainty.

Grain prices could drop next week & not rise again for a year.... No one knows.

But there are certain situations that are showing up that _might_ make things go crazy for a brief period this spring.

If grain prices affect you, you might want to keep an eye on the situation, and be prepared for it. Lots of people will over-react - if you understand what & why is happening, one can see the good and the other side and deal with the brief bubble of prices much better.

--->Paul

[DaleK]

Don't forget fertilizer Paulie. Every supplier I've talked to has been told to expect $100-200 more per ton by spring. Paid for 90% of mine this morning... biggest single cheque I've ever written but if they're right it would save me the price of a new truck by spring...

[sammyd]

wait till wheat hits 12.........

[Carol K]

All the more reason to raise grass fed beef. When I hear what some of my friends spend on grain for their Dexters it makes me shudder. I just know that I can raise my animal of choice on hay and pasture. Wonder what that will do for commercial beef prices?

Carol K

[Patt]

Thanks for the info! We try to keep our grain use just as low as possible but we still have to buy some and it's good to have a heads up to stockpile.

[clovis]

These grain prices scare me a bit. If I had animals, I'd be dumping anything that wasn't productive to the 'stead.

[rambler]

Originally Posted by DaleK

Don't forget fertilizer Paulie. Every supplier I've talked to has been told to expect $100-200 more per ton by spring. Paid for 90% of mine this morning... biggest single cheque I've ever written but if they're right it would save me the price of a new truck by spring...

Oh yea - and fuel prices, if we are to go to 4 & 5 dollar gas, diesel prices will be out of sight. Along with N prices. And seed will be up too.

Gonna be grim, and that is _if_ we get high grain prices.

But folks here don't want to hear all that - not their problem, so I left it out.

Grain markets can keep dropping from today & never get to these prices again. So no promises to anyone what will happen. Just a lot of speculation that come spring, a lot of things could line up right to make a bit of a scrabble for grain...

I did grid sampling of some of my fields this fall, had the coop do it. Spoon-feed fertilizer instead of spread willy nilly. They would call when they got the results. I was expecting to put on P & K this fall... Well just got the bill today for the grid samples - never heard a word of results on it yet, couldn't pre-book, couldn't apply, no idea - but got the bill now? I'll haveta chew some butt there, not happy with that treatment. My coop is on the 'get bigger, not better' plan.

--->Paul

[Patt]

Originally Posted by clovis

These grain prices scare me a bit. If I had animals, I'd be dumping anything that wasn't productive to the 'stead.

I think that's why it is so important for small farmers and homesteaders to figure out what animals work best on their land and what they can feed as much as possible without outside feeds. Not every animal works for every farm.

[oregon woodsmok]

I don't know how it affects grain prices in the USA, but Argentina and Uruguay are greatly increasing both acreage and mechanization for producing soy beans because prices are so high.

Theirs go to China, but if China buys more from them, they will buy less from us.

So much good farmland in the USA has been paved over and covered with tract houses, I wonder about our ability to increase acreage under the plow in order to increase production..

[rambler]

Originally Posted by oregon woodsmok

I don't know how it affects grain prices in the USA, but Argentina and Uruguay are greatly increasing both acreage and mechanization for producing soy beans because prices are so high.

Theirs go to China, but if China buys more from them, they will buy less from us.

Back in the 60s & again in the 80s USA embargoed feed/food exports. We were no longer trusted as a food supplier, and suffered for it for nearly 30 years. The cheap food in the USA was enjoyed by many; but farmers would have imploded without the farm programs that came about. I think everyone would be happier with smaller farm programs, less govt tnvolvemnt, and just a better grain price (not terrible high, just - mor reflective of actual conditions, not manipulated by embargoes or other govt actions.)

China turned to South America, and encouraged their development back then. Only the last 10 years or so, both Brazil & Argenetina have become unreliable - neither has a good infrastructure to hold, transport, and load on ships the increasing grain they are producing. This has bcome a critical deal for them, they are close to letting grain rot because they can't get it under cover or shipped out in time. Argintina has the added problem of a very unstable and very tax-happy govt. The farmers go on strile, then the transport folks go on strike, then the port folks go on strike. The govt ticks everyone off along the way so it happens year after year. As such, while they produce a lot of grain, they do not reliably _deliver_ that grain when it is asked for, and are very much hurting themselves.

This is their summer, and Argentina esp is very dry, concerns of a drought are there. This is one of he beginning signs of a possible spike coming in grains this spring.

I think you are right, in 5-10 years Brazil esp, and Argentena hopefully, will get thier act together & will be much bigger suppliers of reliable grain. Right now, short term, they are struggling....

--->Paul

[fishhead]

I've read that a lot of the money that used to be in real estate speculation is now flowing into food. They did such a wonderful job with our real estate market I can hardly wait until they start gambling on our food supply.

[Patt]

Originally Posted by fishhead

I've read that a lot of the money that used to be in real estate speculation is now flowing into food. They did such a wonderful job with our real estate market I can hardly wait until they start gambling on our food supply.

Yep food and oil, yipee!

[rambler]

So - anyone notice the grain report today, or notice anything about grain prices?

--->Paul

[sammyd]

the mill was paying over 4 for oats earlier this week!

[wwubben]

Originally Posted by rambler

So - anyone notice the grain report today, or notice anything about grain prices?

--->Paul

The report lowered both corn and soybean stocks.Prices took a good jump up.

[salmonslayer]

Your making my head spin rambler but what your saying makes sense. We are seeing very large spikes in fertilizer and feed prices in my neck of the woods to the point where some of the farmers around here (mostly beef and dairy cattle) are greatly scaling back their herds. We have also seen a significant jump in the number of larger farms going up for sale (a big operation here would be a section) but there just arent any buyers.

I doubt the floods and rains in Brazil are going to help things much either but what are you recommending? Wait it out until the prices stabilize and hopefully drop or get your orders in now before prices even go higher?

[Kshobbit]

I hope you are right about the grains going lower in the near future but a lot depends on the weather which has been brutal for most of the world lately.
I hope to get some alfalfa stockpiled since the goats and the rabbits can do just fine with the hay and a small feed supplement. All I have seen is increased prices on all grains and foods. It is getting hard to be more self sufficient on an acreage. My garden will be twice as big this year and I am praying for ample rain and ample sunshine.

[Windy in Kansas]

Wheat stocks were also reported lower, but plantings were up about 10% with Kansas at 8.8 million acres which is about 5% higher than a year ago.

Much of the winter wheat in the western third of Kansas is in very poor condition to simply being dead or never even came up due to drought. I'm not sure how that will play into the game. If sufficient rains come they might plant hard white spring wheat. Only time will tell.

[rambler]

Those of us who grow grain can only see our 'own bvack yard' but many of us felt there was a little less grain 'out there' that previous govt reports have said.

This latest grain report from the govt confirmed that, indeed, there is less grain sitting around. That was a surprise to those who buy & sell and trade grain.

The Funds (investerors) take this as a money making oppertunity, and insrtead of seeling out some like we thought they would, the bought record amounts the past 2 days of grains.

This obviously makes it more likely grains are going up from here. Changes the plan a bit....

Now, farmers have 3/4 of their grains sold, so we won't be making a _huge_ windfall on this. But grains can easily spike up like they diod a couple years ago, and that's an oppertunity for the feed and food manufaturers to up their prices and say well look, see how grain is??? Tho really, most of them pre-bought their grains a few months ago....

--->Paul

[Patt]

Sounds like what gas stations do with gasoline.....