I’m generally a fairly optimistic person but when it comes to the agricultural sector and, more importantly for you and me, us consumers, things aren’t looking too good on the agricultural front. I got up this morning to find soybean futures over 16.50, wheat back up to over 10, and corn flirting with 7.75 on the commodities market. Then I read an article from a JP Morgan analyst indicating that commodities prices could push up as much as 40% higher than they are already. Then there is everything else going on, and it isn’t looking good.
First there is, of course, Ukraine and what’s going on over there. Ukraine is a major producer of wheat and sunflower seed for cooking oil. That supply is now pretty much shut down. Russia exported a large amount of wheat as well and that supply is mostly shut down as well because of sanctions. That’s caused huge disruptions in the markets for wheat and vegetable oils.
Of course things were chaotic even before that. We’re still experiencing shipping issues thanks to ports, shipping companies, railroads and the trucking industry failing to engage in modernizing, improving their facilities, failing to deal with employees fairly and a host of other issues. Problems that have been going on literally for decades but which haven’t become critical until the pandemic stressed the system and it basically broke.
Natural disasters and production problems curtailed the manufacture of herbicides like glyphosate. There have been trade wars going on over the import and export of fertilizers. There is the infamous computer chip shortages which hasn’t just disrupted the auto makers, it’s also messed with ag equipment manufacturers as well. If you’re a farmer in the market for a new tractor, well, good luck trying to find one.
Then there is the drought.
The entire western half of the US is under drought conditions except for northwestern Washington.
Then the avian flu has been sweeping through the country. Here in Wisconsin poultry growers have had to euthanize millions of birds already. In the last two weeks the price of eggs has gone from $1.24 a dozen to over $4.00 a dozen.
But then again I have a cat sleeping on my chest so things aren’t all bad…