(Le Mars) — Despite the current low commodity prices paid to farmers due to the record-setting production of the last couple of years crops, one Iowa State University agricultural economist believes there may be an opportunity for a modest price rally to take place during the spring. Chad Hart recently informed farmers during a crop advantage seminar that this year is looking very much like last year, and farmers will need to strike while they can to capitalize on any potential price rally.
Analysts believe the South American crop production will also be good this year, but Hart says it, too, is resembling last year’s patterns, which is helping the soybean markets.
The Iowa State University Extension Grain Marketing Specialist says producers, and trading partners are watching closely the actions of the Trump administration. Already, Trump has discontinued the efforts to secure a trade agreement with many nations when he stopped the T-P-P Trade Pacific Partners agreement. The next trade agreement that President Trump has said he wants to cancel is the North American Free Trade Agreement, or NAFTA. Both Canada and Mexico are among the best trading partners with American agricultural products.
So much of U-S agricultural trade depends on the value of the dollar in foreign nations. Hart says the value of the dollar has been on the increase, however, trading partners have not been deterred from purchasing U-S grown commodities.
Hart suggests farmers to look at perhaps conducting some forward contracting to take advantage of price rallies when they occur.
