9-27 NWR Break even prices

9-27 NWR Break even prices

David Sparks Ph.D.
David Sparks Ph.D.
This is your Northwest report for Tuesday, September, 27th. I'm David Sparks and farm prices are in the news. Record net farm income has literally been cut in half with the cyclical downswing in bulk commodity prices over the past three years. Sterling Liddell, Senior Vice President for Rabo AgriFinance Says the pendulum upswing began with a major market paradigm shift a decade ago that now has swung rapidly lower. "This is related to a shift in the demand to supply equation. That happened about 2006. When that happened, prices increased, we saw more liquidity come into the markets. There was a lot of liquidity flowing into agriculture and it really lifted the structural price of the commodity which stimulated a log of acres coming in and producing and then we had immediately three years of low production which became somewhat, fool's gold that this agricultural economy will turn profitable going into the future, when in reality, we were building up a scenario where we were going to overproduce this market, drive prices down, unfortunately down below the cost of break even. That's where we are now, where prices have dropped below the price of breakeven for about three years and that has dried up a lot of liquidity.

The U.S. Department of Agriculture's (USDA) Commodity Credit Corporation has announced the marketing assistance loan rates for sugar for crop year 2016 (fiscal year 2017) and have also announced provisions of the fiscal year 2017 domestic sugar program.

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