grain prices again

[rambler]

I don't mean to be a broken record, but some of us are dependent on buying feed & food and count every penny. This is an update & repeat of something I said a while ago.

Grain prices are going up. This week is the Chineese new year, they don't buy much this week, typically grain prices drop on a week like this - nothing to get excited about.

A crop report came out today, and corn is up 25 cents a bushel, beans 16 cents a bushel. We have a little less grain sitting around than we thought....

The trend since harvest has been up, which is rare.

Many are thinking with world demand in other countries that have cash (Egypt, China, etc.) that they will be buying extra grain, and many parts of the world do not have any extra to sell.

With our poorly valued dollar, our grain looks like a good deal, and buyers are stepping up.

This is making grain prices rise in the USA.

This is a good thing as far as global trade, the USA deficit, our imbalance of trade with China, good for rail and shipping industry in the USA. Farm machinery sales & production are up. And with fuel, seed, and fertilizer costs all skyrocketing we really can't have low grain prices at this time - we couldn't afford to plant enough... So in many ways this is really good for the USA, you wouldn't want to stop it....

But if you buy a lot of feed - it's going up in price.

It is possible grain prices will go awful crazy prices over the next few months, until June or so. If people get crazy ideas, or real bad weather happens somewhere. That would be a temporary thing, by mid summer grain prices would return to a more normal level. But if you need a lot of feed, those crazy prices make feed stores charge crazy prices during those few months.....


Of course these are traded prices, something can crash it down in a heartbeat & grain prices drop like a rock. There are no garentees. But something for us to be aware of and plan for.

--->Paul

Oh yes they're going up. I fully expect when I go to buy feed this weekend that whole corn will be ten dollars a fifty pound bag in my part of Florida. With corresponding rises in everything else.

And people think charging fifteen dollars for a p.o.l. pullet is too high! Heh!

[arabian knight]

And cattle prices are up because of the grain costs. So this is a good time to sell, but OUCH on those that have to buy.

[geo in mi]

I've heard it all my life: "You can grow your grain and sell it to usually make a profit. You can grow your grain to feed it and sometimes make a profit. But you can't buy your grain to feed it and ever make a profit."

But, that said, I sympathisize.......

geo

[fishhead]

Extreme weather in China has already destroyed most of their winter wheat crop and is destroying a lot of their vegetable crop too. Australia lost a lot of their wheat too.

Add to that the gamblers that helped bring down the housing market are now gambling on food prices.

[ksfarmer]

I certainly hope wheat prices go sky high, cause mine looks like a disaster in the making. Too dry last fall and winter in this area, lots of wheat never came up. Yields will be drastically reduced around here.

[julieq]

Originally Posted by geo in mi

But you can't buy your grain to feed it and ever make a profit." geo

True. But for those of us with small acreages and livestock that we must buy grain for, we'll be raising our own prices (in our case prices of goat kids). Thus far fortunately we haven't seen any increase in livestock grain prices locally, although chicken feed is certainly up. Having said that, we do expect an increase in both livestock grain and hay prices this year.

[tinknal]

Originally Posted by ksfarmer

I certainly hope wheat prices go sky high, cause mine looks like a disaster in the making. Too dry last fall and winter in this area, lots of wheat never came up. Yields will be drastically reduced around here.

Can you raise spring wheat in KS?

[ksfarmer]

Originally Posted by tinknal

Can you raise spring wheat in KS?

I think it's been done, but not very well. It's usually best to tear the winter wheat out and plant soybeans or milo, depending on if herbicides have been applied of course.

[rambler]

Is. Double crop common in the area, whinter wheat followed by soybeans, or not?

Paul

[Caitedid]

Can I recommend that you look to your local small farmers to buy feed? We raise feed for our stock, and sell a fair bit to other smaller farmers. I know there's no way that we'd feel okay about charging that much over market price for a bag of corn. In our area bagged feed sizes have shrunk too, so now most bags are only 45# instead of 50#, and the price keeps going up. Buying from your neighbor keeps more money local and less in the hands of the larger feed conglomerates.

[ksfarmer]

Originally Posted by rambler

Is. Double crop common in the area, whinter wheat followed by soybeans, or not?

Paul

yes, double crop is done on a limited acerage, planting beans in winter wheat stubble. It is always a gamble and not often do you have a good bean yield. Needs a timely or early wheat harvest and a good rain quickly after planting the beans to get them up and growing. The most common results though are poor stands, short beans and maybe 20 bushel yields. Not really considered a money making effort.

Originally Posted by geo in mi

I've heard it all my life: "You can grow your grain and sell it to usually make a profit. You can grow your grain to feed it and sometimes make a profit. But you can't buy your grain to feed it and ever make a profit."

But, that said, I sympathisize.......

geo

This may well be true which is why I am only slowly growing my operation. I'm not making my living at this, but it at least must pay for itself until I've got the bugs worked out.

[Allen W]

Originally Posted by ksfarmer

I certainly hope wheat prices go sky high, cause mine looks like a disaster in the making. Too dry last fall and winter in this area, lots of wheat never came up. Yields will be drastically reduced around here.

To put this in perspective, Kansas is the US hard red winter wheat crop. HRW wheat is grew in the surrounding states but the Kansas crop makes up the majority of production and sets the price accordingly.

[kmam10]

Corn, Wheat, and other commodities trade like oil now. It depends more on the financial services traders and what they do, and less on supply vs demand. Get used to a lot of volitility, as traders drive up the price then sell to cash in on the profit, taking the prices back down. That is what happened in late 2008, wheat was driven up, prices rose, then they cashed in and it all went back down again. I believe that also happened to rice in the last year or two. The problem for planning ahead: is it an actual increase due to supply and demand or a trading market increase? I didn't buy when it went high the last time gambling it was financial market driven, and it was. I know I won't always guess correctly.

[rambler]

The Funds (many of our retirement accounts, so we can easily be the investers we are talking about here!) have been buying into grains the past 5 years or so. That does affect the prices, especially over winter. If you are an actual grain buyer or a big food producer, you likely have adjusted to buy most of your grains in summer when prices are a tad less violently moving around.

However, there is a real world demand for grains; there are several real world weather events affecting prodiction; and the world ecconomics have made all comnmodities (oil, copper, steel, corn, soybeans, etc.) worth more USA $$$.

So, this current trend is a real, market-driving, situation. It is not based on people throwing money at the grains. It has to do with speculation on grains becoming in great demand in about 6-9 months.

If they offer enough money, and if the weather settles down a bit, it will all blow over by next fall & prices will return to probably high, but normal levels.

Should someone make the crop prices drop a lot with political intervention - embargo or price fixing - then we will not produce as much grain and someone in the world is going to go hungry and that will lead to some real serious issues.

Should the weather go bad in all the grain growing areas of the world, things could get kinda ugly...

90% we will see high prices come this spring as buyers & speculators encourage the world to plant a lot of grains; and then summer weather will look pretty fair and we will have a normal crop and prices will return to normal levels.

This coming period is sorta like a union & company negociations. The buyers run the prices up high when we farmers have nothing left to sell, so we plant a lot of crop, buy a lot of fert & seed - then prices come back down where it's time to actually buy & sell a real crop.

--->Paul

[Patt]

Originally Posted by Caitedid

Can I recommend that you look to your local small farmers to buy feed? We raise feed for our stock, and sell a fair bit to other smaller farmers. I know there's no way that we'd feel okay about charging that much over market price for a bag of corn. In our area bagged feed sizes have shrunk too, so now most bags are only 45# instead of 50#, and the price keeps going up. Buying from your neighbor keeps more money local and less in the hands of the larger feed conglomerates.

I agree! I hope to see more small farmers growing more and more grain since it's the only way we will ride out the increasing havoc global weather patterns are playing on the world's food supply. Amazing how badly we have mucked up the whole food system isn't it?

[Aintlifegrand]

Originally Posted by A.T. Hagan

Oh yes they're going up. I fully expect when I go to buy feed this weekend that whole corn will be ten dollars a fifty pound bag in my part of Florida. With corresponding rises in everything else.

And people think charging fifteen dollars for a p.o.l. pullet is too high! Heh!

Yep... I just bought 50lb for Layena 15.99 50 lb...and Rabbit chow.. 14.99 50 lb...

Ouch...I was out explaining economics to the girls today...those eggs need to start coming more frequently even if it is still winter...and the rabbits.. who knows what's going on with those crazy bunnies...braised rabbit soon to be on the menu...it can be their offspring I don't really care....it is their choice...

[tinknal]

Originally Posted by Caitedid

Buying from your neighbor keeps more money local and less in the hands of the larger feed conglomerates.

I agree. Plan now to add storage capacity and next fall find a local small farmer and buy from him. Pay him a premium for the bother and you will still come out many dollars ahead compared to buying from a mill.

[plowjockey]

Between the ethanol industry and foreign markets, I don't see grain prices coming down any time soon, maybe never.

I have to buy all of my hay, processsed grain feed and grain outside and it's getting more difficult to crunch the numbers, to even get close to breaking even.

It used to be somewhat enjoyable to make a trip to the feed mill.