Harvests are under way of what are projected to be the largest corn and soybean crops in U.S. history, which soon will hit a global market already sitting on the largest-ever grain stockpiles.Things are going to get ugly. Farmers are still passably optimistic, but I think the next few years will probably beat that out of us. Luckily for me, I've never been optimistic.
Indeed, some farmers are hoping for a weather hiccup somewhere in the world to curb yields and breathe life into crop prices that recently hit multiyear lows.
They may be waiting a long time.
It is a dramatic turnaround from four years ago, when prices for many commodities were soaring to the highest levels U.S. producers had seen in their lives. Back then, extreme drought slashed production of major row crops, forcing ranchers to cull cattle herds as feed costs soared.But now farmers face a problem of the opposite sort. Prices for some crops are hovering near multiyear lows as storage facilities bulge with farm goods.
To make space for crops like corn after a massive wheat harvest last summer, Frank Riedl, general manager at Great Bend Co-op, a Kansas grain elevator and farm supplier, bought and leased extra land on which to build bunkers the size of football fields where he can heap millions of bushels of overflow grain.
“There’s an abundance of corn out here in the country and we don’t have the storage base for it,” he says. “Farmers are trying to find any place they can to dump their crops.”
Thursday, October 20, 2016
Crop Glut Worsens
Wall Street Journal: