Top 5 Trend of 2010 – High Commodity Prices
I think one of the major trends for 2010 and going into 2011 is the continuing high level of commodity prices for most grains, livestock, sugar, cotton, etc. In 2008, we had high level of prices in the grains, however, the pricing for livestock was much lower and cotton was close to a $1 cheaper than it is now.
For 2011, it appears that these trends may continue and may even accelerate to higher levels. As farmers, I think we sometimes assume that these prices will be there for much longer than actually happens. I would suggest at least looking at locking in some of these high prices for your 2011 crops and then still participating in some upside potential by using some out of the money options as cheap insurance.
Anytime you can lock in over $1,200 of gross revenue on good corn acres, you should make an excellent return on your crop input investment.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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