commodity prices

Link between commodity prices and inflation is weak

There is little correlation between commodity prices and inflation rates, said a group of agricultural economists writing at the farmdoc daily blog. "Current high inflation rates do not necessarily signal a continuing period of high commodity prices," they said, pointing to "plateaus" when corn and soybeans cluster around long-term price averages.

Lawmakers mull margin protection, permanent disaster program for crops

Concerned by rising production costs and the longevity of sky-high commodity prices, farm-state lawmakers floated margin protection for crop growers and standby farm disaster programs on Thursday for inclusion in the 2023 farm bill. However, farm bill funding may be tight, which could limit Congress’ ability to add new features to the farm program.

Boom in commodity prices more likely to be transitory than permanent

Electrified by Russia's invasion of Ukraine, commodity prices are sky high, with soybean futures topping $16.80 a bushel and the USDA forecasting the highest-ever farm-gate price for wheat. But high prices for corn, wheat and soybeans are far more likely to revert to their long-term averages than mark the dawn of a new era of permanently higher prices, said five university economists on Tuesday.

Farmland values rise alongside strong ag economy

Persistently strong commodity prices in the opening months of the year fueled a sharp growth in farmland values throughout the Midwest and Plains, said a Federal Reserve report on Thursday.

Biden encourages larger U.S. crops to feed world, blunt inflation

President Biden will announce three steps to encourage American farmers “to boost production, lower food prices, and feed the world” during a visit to a family farm in northern Illinois on Wednesday afternoon, said the White House. Action by the USDA would be a response to Russia’s invasion of Ukraine and to high inflation at home.

War drives UN food index to highest level ever

The UN index of food prices, already at a record high, rose by 12.5 percent in reaction to Russia's invasion of Ukraine, with world wheat prices soaring nearly 20 percent, said the Food and Agriculture Organization. Wheat prices were so high, said USDA analysts in a separate report, that consumers in sub-Saharan Africa may find it cheaper to eat rice, ordinarily the more expensive staple grain.

USDA says food inflation rate to soar, highest since 2008

Prices for common elements of the U.S. diet, from poultry and dairy to fruits and vegetables, are rising at double or triple their usual rate, said the government in forecasting the highest annual food inflation rate in 14 years. The Agriculture Department said food prices would rise an average of 5 percent this year, an abrupt two-point increase from its forecast a month ago.

Think tank sees highest annual food inflation rate in 14 years

U.S. food prices will rise by at least 4.2 percent this year, propelled by high energy and commodity prices, said a University of Missouri think tank on Wednesday. The group’s director said the actual figure could be higher still.

With eye on Ukraine, G7 ag ministers warn nations to avoid food hoarding and profiteering

To mitigate the impact of war in Ukraine on global food supplies, the G7's agriculture ministers called on all nations to keep their trade channels open and to guard against unjustified limits on exports. "We will not tolerate artificially inflated prices that could diminish the availability of food and agricultural products," said the ministers in a statement after a special meeting convened via the internet.

U.S. food prices insulated from warfare in Ukraine, says Vilsack

The Russian invasion of Ukraine will have, at most, a muted effect on U.S. food prices, said Agriculture Secretary Tom Vilsack on Thursday. “We have tremendous (domestic) production capacity,” he told reporters attending the USDA’s annual Agricultural Outlook Forum.

USDA says high input costs will dampen corn plantings

U.S. farmers will pare corn plantings by 1.5 percent and modestly increase soybean acreage this spring in the face of high input costs, projected the USDA on Thursday. High yields would bring the largest corn and soybean crops ever in America and pull down season-average prices for the two most widely planted U.S. crops.

USDA to put $1 billion into climate-smart pilot projects

The USDA will spend $1 billion on climate-smart pilot projects, Agriculture Secretary Tom Vilsack announced on Monday, delivering on a pledge made last September to help farmers develop a market for sustainably produced commodities. The demonstration projects could change the shape of U.S. farm policy, but the clock already is ticking toward the 2023 farm bill and funding for climate mitigation is not certain.

Farm income is forecast far above average for second year

Record-high expenses and sharply lower federal subsidies will erode farm income in 2022, according to a forecast by the Agriculture Department. Nonetheless, U.S. agriculture would see one of its best years on record, with net farm income 26 percent above its 10-year average.

Farmers feel less need to borrow money from the bank

The strong agricultural economy, fueled by high commodity prices, has reduced farmers' reliance on farm lenders, despite concerns about rising input costs, according to a Federal Reserve survey of ag bankers. "Higher costs are likely to put upward pressure on demand for credit, but strong farm income and working capital could also supplement financing for some borrowers," said the Kansas City Fed on Thursday.

Highest U.S. farm income in eight years, but headwinds in 2022

Despite the disruptions of the pandemic, U.S. farm income, a broad measure of profits, will be the highest since 2013, thanks to strong corn, soybean, wheat, broiler, cattle, and hog prices this year, said the USDA on Wednesday. "It is primarily a price story," said USDA economist Carrie Litkowski.

Meat prices climb on high demand and supply constraints

Strong consumer demand for meat and labor shortages at packing plants were factors in persistently high meat prices this year, said the USDA on Tuesday in a monthly report on food inflation. Meat prices were forecast to climb by 6.5 percent this year, double its long-term average of 3.2 percent annually.

USDA: Strong U.S. economy but falling crop prices in 2022

The red-hot U.S. recovery from the pandemic, with the fastest economic growth rate since 1984, will moderate to a still-strong 3.5 percent in 2022, said the USDA in its first look at the agricultural economy in the new year. Farm-gate prices for corn, soybeans, wheat and cotton, the four most widely planted crops, were projected to decline as production, suppressed by the pandemic, catches up with demand.

Highest farm income in eight years, but one-third comes from government

Higher prices for corn, soybeans, hogs, cattle, and broiler chickens — top U.S. ag products — will boost net farm income to $113 billion this year, the highest since 2013, estimated the Agriculture Department on Thursday. Income would be 26 percent higher than the 10-year average, reflecting the economy-wide recovery from the pandemic.

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