Odd Lots This Is the Perfect Storm That Caused Grain Prices To Soar
Nov 11, 2021
Angie Setzer, co-founder of Consus ROI and former vice president of grain at Citizens Elevator, discusses the surge in grain prices driven by inflation, high global demand, and unpredictable weather patterns. She delves into the complexities of the agricultural market, highlighting how rising costs for fertilizer and trade dynamics affect farmers' decisions. The conversation explores the interconnectedness of major crops and the challenges posed by labor shortages and supply chain pressures, all while emphasizing farmers' resilience in navigating these turbulent times.
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The Perfect Storm
- In September 2020, the USDA overestimated ending grain stocks, leading to initially low prices.
- China's unexpected buying spree, coupled with weather issues in Brazil and Canada, drastically shifted the market.
Rising Input Costs
- Land values are increasing due to urban sprawl, impacting farmers' input costs.
- Farmers face rising expenses in equipment, fertilizer, chemicals, seed, and general cost of living, squeezing their margins.
Deere Strike Impact
- The Deere strike has increased anxiety among farmers regarding equipment repairs and parts availability.
- Farmers are now stocking up on parts due to supply chain disruptions and increased used equipment costs.