The cure for high prices is high prices, and the cure for low prices is low prices.

The problem with this rule of economics is that prices usually stay lower for longer periods of time than they stay higher, says Max Runge, Auburn University Extension economist.

“We’ve had some lower prices this past year,” says Runge. “This coming year may not be as good as this past year, but I think prices still will be pretty good.”

Runge presented the market outlook at the recent Central Alabama Corn Production Meeting held in Autaugaville.

U.S. corn and soybean production was the smallest this past year than it has been in three years, he says. “Our wheat crop was the smallest in five years. We don’t know yet if that is good or bad news. Foreign production hit a record high, so that’s hurting our export markets a little. Some of the indications are that 2012 corn acreage is going to be up, and there are some other factors impacting the market.”

The underlying factor may be weather, says Runge, and this past year it depended upon where you were located. Southeast Alabama was almost a total disaster, the Tennessee Valley was good, and west Alabama was mixed, he says.

“The drought outlook from December 2011 to February 2012, shows the drought will persist or intensify in the Southeast. Weather forecasts are not always accurate, but if they are right, we need to be aware of the possibility.”

As of now, for some areas of Alabama to get back to normal moisture levels, about 30 inches of rain would be needed or 120 to 125 percent of normal amounts, says Runge.

“Most of the mama cows in the United States are in Texas and Oklahoma, and since they’ve had such a severe drought, they’ve had to get rid of some of those cows. A lot of the corn in the U.S. goes to feed cattle, but there are fewer cattle out there. Most of our corn doesn’t necessarily go to feed cattle, but it goes to feed chickens. There will be some lingering effects to the drought” he says.

In Alabama, the eastern region and the southeastern corner were hit hardest by drought. In Georgia, the southwest quadrant, where most of the agriculture is located, was affected.