May’s World Agricultural Supply and Demand Estimates, or WASDE, report is shining a biofueled ray of light as it forecasts higher average prices for soybeans and corn.
Each month, the U.S. Department of Agriculture’s World Agricultural Outlook Board issues the WASDE report to provide annual forecasts for supply and use of U.S. and world wheat, rice, coarse grains, oilseeds and cotton. The report also covers U.S. supply and use of sugar, meat, poultry, eggs and milk.
Plant-based fuels such as biodiesel and ethanol are helping drive soybean and corn prices. WASDE also forecasts higher prices for rice and cotton, driven by a potential El Niño and higher input prices, respectively.
What it means for farmers
Farmers have struggled for the last few years, stuck between lower commodity prices and higher costs of doing business. While higher commodity prices are welcome, will they improve conditions for farmers?
“As frequently stated in economics: ‘It depends,’” said Scott Stiles, extension economics program associate for the University of Arkansas Division of Agriculture.
Hunter Biram, extension agricultural economist for the Division of Agriculture, said it behooves farmers to consider using risk management tools, including forward contracts, to lock in some price upside prior to harvest.
Source : uada.edu