Commodity Price Surges Change Agriculture Again

Commodity Price Surges Change Agriculture Again

Is it forever, or just for a while? Jury still out.

If your grandpa or even dad has passed on, and did so before 2005, if you could tell him today you're selling corn for around $6 per bushel and soybeans for around $12 per bushel, or hogs at 70 cents per pound, sheep at $1.70 per pound and steers at over $1 per pound, he would probably think you were out of your mind. Those price levels were unheard of until just a few short years ago.

Of course so was $800 per ton or higher potash, $250 per bag seed corn and $1,000 per ton anhydrous ammonia. And if you told him you just paid $7,000 an acre for the farm next door, well, it would be heart attack time if he was still living.

The change has come swiftly to agriculture in the last decade. The first year of the next decade seems to promise more of the same. It has always been a risky business, now it's a high-stakes, risky gamble each and every year.

Ethanol made for use in fuel has brought controversy, but it has also helped consume corn crops at a national level that would have strangled prices and held them in the $2 range at best just a few years ago. When the change brought on by ethanol in corn prices started a few years ago, some economists argued it was just a blip, not a new level of pricing. That argument still hasn't been decided. There's so much volatility in the world that anything could change at any minute. But if this is a fad, it's a long one.

During the same time, biotech research companies have brought out Bt rootworm, Bt events that control more insects, better events for control of cotton pests, and are not working on a series of output-side trades, including soybeans which could produce an oil that mimics fish oil. At the same time, biotechnology is helping major players reinvent 2,4-D for crop use, and dicamba for soybeans. The dicamba in beans will add another mode of action and presumably slow down the possibility of more resistant weeds developing quickly that glyphosate can't control.

Machinery companies introduced auto-steering, which caught on much more quickly than tractors ever did, and have continued to perfect precision farming options. Planting without markers is commonplace, and planting all night in a year like this one was reality. Companies are working together to make sure more of the software and hardware that makes precision farming happen can talk to one another.

Who knows what this decade holds!

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