Grain prices rising on increased demand
Hindsight is 20/20 when it comes to grain prices.
Prices for soybeans and corn started going up in November and have risen steadily since then, bringing the wheat price along with them.
An experienced farmer who has seen prices rise and fall has even predicted $9 a bushel wheat by September.
At Cooperative Grain and Supply, the price of beans on Friday was $4.80 higher than it was a year ago. Corn was $1.50 higher, milo was $3.54 higher, and wheat was $1.46 higher.
Grain coordinator Dick Tippin said demand from China is driving the export market. He said Chinese feed demand is strong because the country is rebuilding its hog herds after they were decimated by swine flu several years ago.
China is buying milo again after buying none the previous year; hence, the big jump in price, Tippin said.
Other factors that enter in are South America’s lack of grain stocks as it is just starting its soybean harvest, dry weather in several wheat-producing regions of the world, and investors buying commodities.
“The USDA ending stocks report showed stocks a little lower than expected,” Tippin said. “The bean supply is tight.”
He is encouraging farmers to contract some of the 2021 harvest at current prices.
“It’s always good to lock in a profit,” he said.
He noted that crop insurance provides a buffer in case the contracted bushels can’t be delivered.
He expects prices to stay relatively good for a while.
“Of course, there are a lot of things that could happen to bring prices down,” he said.
Eugene Just of Marion is one of many farmers who sold their grain when it started to go up in price.
“I held it some but I didn’t hold it long enough,” he said. “We thought we got a good price but probably could have gotten $3 more.”
He remembers times when he held grain thinking it would go up in price, but he ended up losing money.
“This is plumb crazy,” he said. “You can’t plan anything anymore. Forty years ago, a five- cent fluctuation in the price was a big deal.”
Ed Vinduska, a Tampa farmer, said the price increases have helped him.
“No farmer can make money at $4 wheat,” he said. “I’ve sold some grain but kept some corn back.”
Vinduska is not contracting any grain right now.
“If the price keeps going up, why park in front of a freight train,” he said.
Alan Hett of Marion is happy to see the higher prices. He said he held off selling soybeans until after the first of the year.
He did contract some soybeans earlier for February delivery, after which the price continued to rise, but he is satisfied with what he is getting.
He sold some corn last year, and the rest will be delivered to an ethanol plant in February. He sold all of his wheat last year and is looking forward to a good harvest this spring. He hopes the higher wheat price will be sustained.
“If I knew what grain prices were going to do, I’d just play the market and sit on a beach somewhere,” he said.
Last modified Feb. 3, 2021