Chairman shares letter
- Grain and soybean prices should rebound
^ I would like to share with our
? readers a letter I received from Dr.
; Everett Nichols, North Carolina
Extension Service Agricultural
; Economist. The subject of the letter
' was "Grain and Soybean Prices
Should Rebound."
?
! Farming
Th?
FUtUmb
north Carolina
AGRICULTURAL
EXTENSION
SERVICE
By Bill Jwstwi
CltSMtW CtUMMH
?
; "Grain and soybean producers
; may be wondering if they have
already seen the market highest,
* since prices have taken a sharp
* tumble since late September. The
* battering began in the futures
market u many (peculators lost
their nerve and started baling out of
their contracts."
"Farmer* saw prices dropping and
began to step up selling actual grain.
The drop in price has been feeding on
itself as harvest gets underwya, but
the decline should stabilise quickly
because of the short fall in produc
tion."
"Prices will soon begin to work
higher again. A review of the USDA's
supply and demand report for these
commodities clearly indicates that
prices are likely to return to the
previous high or higher."
"The 4.39 billion bushels of corn
estimated to be produced in the
United States, whn added to 3.43
bushels of October 1 carry-over, will
total about 7.82 billion bushels of corn
available for 1983-1M4, down almost
27 percent from last year."
"On the surface, this quality ap
pears sufficient, even to meet the
level of utilization equal to the ex
pec ted 7.2S billion bushels of the year
just ending. Such utilisation results
in ending stock below 800 million
bushels ( about four weeks supply ) . "
"Free market stocks would be
even lower considering that some
grain would remain in the farmer
held reserve and CCC stocks. Pipe
line needs will not allow carry-over
stocks to be reduced to such low
levels."
"Hence, a substantially higher
price above last year's farm average
of 92.65 will be needed to ration the
supply avaialble in the year ahead."
"The USDA estimates that the
seasons average corn price for 1983
1984 will be $3.50-13.75 per bushel.
Domestic livestock producers will be
most responsive to that rise in price
and are expected to cut usage 20
percent from a year ago to 4.05 billion
bushels."
"Relatively inelastic domestic
demand for products that contain
corn and a tariff protected feed grain
market in drought plagued Europe
will allow some growth in the food,
industrial and seed use and export
categories. The former will increase
by only S.S percent, while the latter
may increase by 4 percent."
"Similarly the 1.92 billion bushels
supply of soybeans expected to be
avaialable for 1963-84 will have to be
rationed at the price higher than last
year's of $5.65 a bushel when
utilization approached 2.1 billion
bushels. Additional strengths for
soybeans will be generated by tight
world edible oil supplies resulting
from substantially reduced
production of palm oil this year."
"Higher soybean meal and oil
prices should allow farm prices to
average between $8.50 to $9.50 per
bushel according to the USDA. That
level of price should cut domestic
crush by 8-10 percent from last year
and slash exports by as much as 15 to
18 percent."
"When will the price rebound
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RE-ELECT
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occur? Given that the level of corn
and soybean supplies are known, the
expected rebound will occur as ac
tual rate of usage of these two crops
become apparent. This may not
happen immediately, it may take
several months as weekly report
trends and expectations about
domestic feed disappearances
develop."
"Corn and sobyean producers
shoud follow market developments
very closely during the next few
weeks and seek ways to make the
most favorable price level when they
occur for both the 1963 crops as for a
portion of the 1984 crop."
Let me take a few moments to
summarize several points that Dr.
Nichols made in the brief letter.
r
First, Dr. Nichols indicates that I
is a temporary blip in the
that will soon stabilise itself becau
of our shortfall in production.
He further indicated that
will gradually begin to work up at
higher level as the year goes
and consumption levels and i
are recognised. The bottom line
that in IMS due to the PIK |
and extreme drought, we have
short fall in production of corn
soybeans.
I will accept any SOYBEJ
CONTEST ENTRIES for the i
and state soybean yield coot
during the ne^t month. The lai
several years a 1st and 2nd pla<J
plaque has been awarded
Hertford Lions Club.
ANNOUNCING
North Carolina
DUROC
BREEDERS
ASSOCIATION
DUROC
SHOW & SALE
BRED GILTS, OPEN GILTS, BOARS
NOVEMBER 1
Show Sale
3:00 P.M. 7:00 P.M.
Albemarle 4-H Livestock Arena
Elizabeth City, N.C.
i
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