What is a common cure for high prices?
“High prices!” is often the response you get to this question from some commodity market enthusiasts.
To me, this statement reflects a notion of high commodity prices attracting additional production from as many sources as feasible.
Gannett writer Philip Brasher reported recently that, “Soaring crop prices are coaxing landowners across the Midwest and Great Plains to put Conservation Reserve Program acreage back under the plow, and Congress is considering reducing the program even further.”
“A farm bill that leaders of the Congressional agriculture committees drafted this fall would cap the $2 billion-a-year Conservation Reserve Program at 25 million acres nationwide, down from the current limit of 32 million acres.
“When the program was created in 1985, the government was allowed to enroll as many as 45 million acres.”
Mr. Brasher explained that, “The program has lost acreage as 10-year contracts have expired and crop prices reached historic highs. About 29.6 million acres are enrolled after landowners pulled 2 million acres out of the program as contracts expired Sept. 30 at the end of the 2011 budget year.
“Contracts for another 6.5 million acres nationwide expire at the end of fiscal 2012 and an additional 3.3 million acres expire in 2013.”
“Some of that land could be re-enrolled, but landowners are likely to put much of the acreage under cultivation because of the returns they can get from corn’ said Chad Hart, an economist at Iowa State University.”
Additionally, we see efforts to boost production in several South American production areas, and the Former Soviet Union.
Farm commodities are somewhat unique in their ability to ramp up production. Darrel Good, Department of Agricultural and Consumer Economics, University of Illinois writes, “Harvested acreage of U.S. crops in 2012 could exceed that of 2011 by several million acres. The increase would come from fewer prevented plantings, less abandonment, and a decline in CRP enrollment.
“A return to trend yields in 2012 in combination with more acreage would result in much larger crops. At this juncture, the largest year-over-year increase in production might be expected for corn.”
(To see the complete report of Good’s comments, see http://southeastfarmpress.com/grains/crop-acreage-increase-expected-2012).
I have basically made all my 2011 crop marketing decisions. It’s all gone except for a little bit of un-priced corn I’m gambling with.
I believe it is now time to look 100 percent towards what we intend to do with our anticipated 2012 production.
It may be worth your time to keep an eye out for grain marketing educational opportunities that will be available over this coming meeting season.