10/25/2016Broiler Economics: The (Not-So-Low) Harvest Low, Oct. 2016
It is often the case that grain prices reach their lowest price of the year during the harvest or shortly after the harvest. This year appears to follow that pattern. Unfortunately, the harvest low is not quite as low as it otherwise would have been due to wet conditions in the US Corn Belt.
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08/23/2016Broiler Economics: Drought Danger Appears to Have Passed, Aug. 2016
Two months ago it seemed that a drought in the Midwest of the US was likely. As a result, grain prices rose substantially in part due to those fears and in part due to crop problems in South America. The combination of a lower crop in both North and South America would have sent prices to exceptionally high levels. As it turned out, it appears that the market only has to deal with the lingering effects of the short crop in South America earlier this year not a short crop in North America. In fact, crops this year in North America are on their way to being record large.
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06/29/2016Broiler Economics: The Importance of South America, June 2016
Just 10 years ago, the production of soybeans and corn in South America was significant but not determinant for world prices. Back then attention was usually focused on production in the US while South America was mostly ignored.
The tables have now turned. Ignoring South America is perilous. A good illustration of this occurred in April when the combination of flood in Argentina and drought in Brazil led to a sudden increase in the world price of corn and soybeans. Traders and pundits alike were caught by surprise and unable to act quickly. The effects were huge because South America is now gigantic in world production and trade.
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04/22/2016Broiler Economics: Bottom of the Cycle Near for Grain Prices, April 2016
Grain prices, when expressed in dollars, are much lower than a few years ago. Barring a major weather problem, both corn and soybean prices should remain relatively low throughout the year. Unfortunately, grain prices, when expressed in the local currency of many countries, rose over the last year.
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02/19/2016Broiler Economics: Only in dollar terms are grain prices falling, Feb. 2016
The world poultry industry is divided into those companies that are experiencing falling grain prices and those that are experiencing rising grain prices. Although grain prices in Chicago have been trending lower in dollar terms, grain prices are rising in the local currency of many countries. Examples of this include Canada, Mexico, Brazil and Argentina in the Americas, oil producing countries like Russia, and emerging economies in Asia such as India and Thailand.
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