Farm Industry Trends
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Cotton Reaches 15 Year High
As cold weather threatens the crop in China, cotton has reached a new 15 year high in prices. At the beginning of 2009, cotton prices were approximately 50 cents a pound. As of today, the price is well over 95 cents a pound and if the adverse weather in China continues, the price may go […]
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Better Investment – Farmland or Stocks?
As you can probably guess this headline that the answer is – “It Depends”. Iowa State University economist Mike Duffy ran some numbers comparing the return from owning farmland to owning stocks over certain time frames. Returns are comprised of two components: Yearly return – Cash dividends on stocks and cash rents (or the equivalent […]
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Verasun Bankruptcy – Check Your Preference Payments
Whenever a farmer sells a crop to a purchaser of their product, they always need to be aware of what happens if that purchaser goes bankrupt. Any payments that the farmer receives within 90 days of bankruptcy can be considered preference payments and the farmer may have to pay some or all of these payments […]
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New Game Plan for Potash
Potash Corp. of Saskatchewan is one of three Canadian potash producers who Canpotex. Canpotex handles all of their sales outside North America. Two other similar organizations are Belarusian Potash and International Potash. These three entities control nearly 70% of the world’s potash production. By cooperating with each other, they are able to mitigate any decreases […]
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Russia Extends Its Wheat-Export Ban
The Wall Street Journal had a fairly extensive article in today’s paper on the extension of the ban of wheat exports by Russia from December of this year until after next year’s crop. However, as most traders and farmers know, you will believe what Russia says at your own risk. What we do know from […]
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Wheat Basis Has Widened by up to 44%
Kansas State University provides a very good map of basis for most of the major crops over most of a five state region comprising all of Kansas, Nebraska, Oklahoma and parts of Texas and Colorado. These maps on a weekly basis show what the current basis is and how it compares to the three year […]
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What will Yields Look Like in 50 Years
I have read several articles recently regarding the trend in yields for corn and beans over the last 20-30 years. During the 1980’s and early 1990’s, the average increase in corn yields was about 1.5%. During the last 15 years or so, the yield increase has been closer to 2%. How will corn yields look […]
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Bring Home the Bacon
After at least two years of massive losses, hog farmers are now starting to enjoy much higher prices for their products. Most of the studies I have reviewed indicated that most farmers that raised hogs probably lost anywhere from $20 to $60 per hog produced in 2008 and 2009. Based on the higher current prices, […]
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Wheat Futures are Up – Cash Market is Barely Up
It appears as usual that there is a buying frenzy in the wheat futures market that has not totally transferred over to the cash market. Since early June, the Wheat Futures market has gone up by about 80% whereas the cash market has gone up by much less leading to a large widening in the […]
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How High Will the Potash Corp. Price Go
Reuters is reporting that Potash Corp. has formally put pressure on BHP to raise the price for its takeover of Potash Corp. or have the company get sold to some other company. BHP originally bid $130 per share for the company or $39 billion in total. The price has already jumped to over $150 per […]