Just in from Washington

Near Riggins, Idaho, Putnam photo

Commodity Price Climb Started in Midsummer

Washington--The Agriculture Department’s October crop report that showed a smaller-than-expected corn crop is helping drive commodity prices upward, but the price climb really started in midsummer when Russia decided to suspend wheat exports, according to John Anderson, AFBF economist.

“It really kind of put commodity markets on edge and we have followed that now with consistently lower estimates of what U.S. corn production is going to be. It looks like we will actually end the current marketing year with fairly tight corn stocks. Yields are much lower than we thought they would be a couple of months ago,” Anderson said.

A higher corn price is good news for crop producers, but it will make for higher feed costs for livestock producers.

“This is a tremendous concern for livestock producers,” Anderson said. “This is very rough, but I would expect we’re probably looking at something like a 30 percent increase in feed costs for most segments of the livestock and poultry industry. And if you look at feed costs in general, that’s going to be about two-thirds of total costs for these industries.”