Declining Commodity Prices Not The End Of The World

Corn stalksTo refute Chicken Little, the sky is not falling. Last week, I spent some time in Manitoba talking with ag retailers and growers at a Wolf Trax-sponsored tour of agriculture in the Canadian province. In between touring grower operations, research fields and a communal farming colony, much of the talk centered on the recent fall in commodity prices taking place in the U.S. Many of the attendees were near panic stricken that corn futures were trading in the mid-$4 per bushel range and soybean futures had dropped below $12.

When these individuals asked me my thoughts on this matter, I replied with one simple word.

And?

I’ve covered the agricultural marketplace for 13 years now. In the time, I’ve witnessed a seemingly endless cycle of commodity price ups and downs. Heck, in 2000 when I first started working at CropLife magazine, corn regularly traded in the $2.50 per bushel area and soybeans were around $7.50. Back then, the prospect of $4 corn and $10 soybeans would have been cause for celebration. Today, however, following roughly four years of near-steady prices of $7 corn and $15 soybeans, any prices less than these are viewed as something of a disaster.

But if there’s one take-away from my time spent in agriculture, it’s that this industry is very resilient and adaptive to whatever changes come its way. So I have no doubt whatsoever that the majority of ag retailers and their grower-customers will continue to make money from agriculture, regardless of the commodity prices points. After all, with the world’s population expected to hit nine billion in the next few decades, commodity prices will inevitably go back up.

Leave a Reply

One comment on “Declining Commodity Prices Not The End Of The World

  1. As we sometimes sit and contemplate what happens with prices of commodities such as corn, soybeans and wheat anyone of us who have lived in the world of agriculture that yeah the swings in prices are here. So I counter by asking all to look at land prices at all time bulging prices – that cost to production is staggering. Look at the price of high quality seed corn with the technology traits, $300+ per bag which covers a dash over 2.2 acres per bag. Prices for fertilizer are nothing short of cough, cough that was a lot per acre. Insecticides, herbicides, fungicides, fumigants cause one to stagger backwards. Harvesting costs rise each year, trucking fees, taxes, licenses, good labor cost to keep good people and we note that $4.00 corn is doable, what? Have you really counted up all the costs for the grower? Even with top management strategies, hedging, watching the market 4X per day we feel the incredible squeeze of the margin shrinking and shrinking. Should we all call the auctioneer, by no means. But I recommend we really count the costs, step into the shoes of a farm manager and see what it takes. Yes there is a good deal of money that exchanges hands but the grower feeds a village full of people each day and does not live like a king – so I challenge us to look at those costs and what the profit margins really are.

Eric Sfiligoj Stories

Eric SfiligojCourt Rejects EPA Objection To Enlist Duo
February 1, 2016
It was pretty big news last fall when, just before Thanksgiving, the EPA attempted to withdraw its approval of Dow Read More
Soybean field
Eric SfiligojThe Biotech Crop Use Divide
February 1, 2016
A few years ago, I wrote a column speculating that the anti-biotech crop movement was beginning to lose some of Read More
Seed bags in warehouse
Eric SfiligojFeedback From IFCA: Growers Looking To Cut
January 25, 2016
For anyone paying attention to the agricultural marketplace lately, the numbers are ugly. Between 2014 and 2015, grower-customer income dropped Read More
Syngenta Sign
Eric SfiligojSyngenta In Play: Who Will Win the Prize?
January 18, 2016
Last week, while many business analysts watching in horror as global stocks tanked across the world, one agricultural company’s stock Read More
Top 100 Articles
Elburn Cooperative
CropLife 100Elburn Cooperative Members Vote To Join CHS
December 28, 2015
With 81% of eligible producers voting, 94% cast an affirmative ballot for Elburn Cooperative, a diversified agricultural retailer based out Read More
West Central Cooperative, Jefferson, IA
CropLife 100Farmers Cooperative-West Central Merger Approved
December 21, 2015
The members of Farmers Cooperative Co. (FC), Ames, IA, and West Central Cooperative, Ralston, IA, have both approved the merger Read More
Wheat Growers Innovation Center, Bath, SD
CropLife 100Wheat Growers Opens Innovation Center
December 21, 2015
Wheat Growers’ commitment in providing its farmer-owners with the latest in technological advancements now has a one-of-a-kind focal point, as Read More
CropLife 100ARA Selects The Andersons As 2015 Retailer Of The Year
December 9, 2015
The Agricultural Retailers Association today named Maumee, OH-based The Andersons as its Retailer of the Year for 2015. The award Read More
CPS Washington Court House John Deere Sprayer
CropLife 100Application Equipment Report: It Is Easy Being Green For Top 100 Ag Retailers
December 5, 2015
On The Muppets television show, Kermit the Frog is famous for singing a song about the troubles he encounters in Read More
Fertilizer Bin
CropLife 100Fertilizer Sales: Another Down Year For Top 100 Ag Retailers
December 4, 2015
In pure number terms, the fertilizer category still dominates all crop inputs/services among CropLife 100 ag retailers. In 2015, for Read More
Latest News
Soybean field
FungicidesFour Arysta Fungicide Formulations Given FIFRA Approval…
February 8, 2016
Arysta LifeScience North America recently announced the issuance of Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) Section 2(ee) Recommendations for Read More
FungicidesAgri-Fos Systemic Fungicide Plus Receives EPA Registrat…
February 8, 2016
Vivid Life Sciences has announced the EPA registration of Agri-Fos Systemic Fungicide Plus, a highly concentrated active ingredient phosphite fungicide, Read More
Crop InputsBayer Contests EPA’s Decision On Valuable Insecticide F…
February 5, 2016
Crop Science, a division of Bayer, has announced it has refused a request by the Environmental Protection Agency (EPA) to Read More
Wheat Field North Dakota
Seed/BiotechSyngenta Wins Seed Fraud Suit Against South Dakota Grow…
February 5, 2016
Syngenta has obtained a $25,000 settlement from Paul and John Mayclin, Mayclin Farms, Plankinton, SD, in response to their Plant Read More
ManagementOABA Annual Conference Wraps Up In Columbus
February 5, 2016
More than 300 Ohio AgriBusiness Association (OABA) members and industry professionals were on hand to engage in collaborative learning and Read More
Crop InputsBayer To Contest EPA Flubendiamide Decision
February 5, 2016
Crop Science, a division of Bayer, announced today it has refused a request by EPA to voluntarily cancel the uses Read More
Syngenta
Seed/BiotechNot So Fast: ChemChina Syngenta Takeover Could Draw Nat…
February 5, 2016
State-owned China National Chemical Corp. (ChemChina), which plans to buy Swiss seeds and pesticide maker Syngenta, will promptly start preparations Read More
Rendering of Syngenta Seedcare Institute expansion
Seed/BiotechExpansion Of Syngenta’s North America Seedcare In…
February 4, 2016
As demand for seed treatment knowledge and products grows among farmers, retailers and others in the seed industry, Syngenta is Read More
Soybean Field
Industry NewsArysta LifeScience Strengthens Sales Team
February 4, 2016
Arysta LifeScience North America recently announced three new personnel additions: Jake Cook and Peter White are Territory Sales Managers for Read More
Davor Pisk Syngenta COO
Crop InputsSyngenta COO: Why ChemChina Offer Beat Monsanto’s
February 4, 2016
Syngenta Chief Operating Officer Davor Pisk says he is confident the proposed acquisition by ChemChina will ultimately help preserve choice Read More
Young corn plants in soil
Crop InputsKoch Biological Solutions Invests In Pathway Biologic
February 4, 2016
An affiliate of Koch Biological Solutions, LLC has acquired a minority equity position in, and entered into collaboration with, Pathway Read More
Crop InputsABG: China Signs Off On Monsanto’s Roundup Ready …
February 3, 2016
Monsanto Co. on Wednesday announced it plans to launch its Roundup Ready 2 Xtend soybeans in time for the 2016 Read More
Syngenta headquarters in Basel, Switzerland
Crop Inputs6 Things To Know About The ChemChina-Syngenta Deal
February 3, 2016
After months of rumors and speculation, Syngenta has announced that ChemChina has offered to acquire the Swiss-based company. “In making Read More
FertilizerPhosphorus: Is Band Or Broadcast Application The Better…
February 3, 2016
Is band or broadcast application the better method when it comes to phosphorus? The answer to this question depends mostly Read More
Syngenta Sign
Crop InputsChemChina Nearing Deal To Buy Syngenta For Record $43 B…
February 3, 2016
China National Chemical Corp. is nearing an agreement to buy Swiss pesticide-and-seeds-maker Syngenta AG for about 43.7 billion francs ($42.8 Read More
Herbicides2015 ASA Trials Demonstrate Valent Fierce XLT Herbicide…
February 2, 2016
Valent U.S.A. today announced that new Fierce XLT Soybean Herbicide ranks in the top tier among growers for length of Read More
Crop Protection Products in storage
Paul SchrimpfCrop Input Selling: Return Of The Price List
February 2, 2016
It was a good 15 years ago, shortly after I first started writing for this esteemed publication, that it all Read More
Potash storage at Growmark
FertilizerThe Phosphate And Potash Outlook For 2016
February 2, 2016
Like other commodities, prices of the leading plant nutrient products dropped sharply in 2015. At this writing, the price of Read More