Then Vs. Now — An Overview of Farm Inflation from 1927 – Present
We have seen inflation take off in the last year posting a 6.2% rise in the CPI year-over-year through October 2021 - when thinking about a one-year raise, this is a large and problematic number. This prompts several questions on whether inflation has impacted farms’ profitability in the past few years — like what does this CPI number look like over the long haul (What do we mean by long haul, say about 100 years), and how does it affect farm profitability? Luckily, RCM Ag Services recently launched a whitepaper that dives into this topic and more. In this paper, ...
AG MARKET UPDATE: JANUARY 6 – 13
The USDA report was met with a mixed reaction on Wednesday as markets traded both higher and lower immediately following the report. Thursday brought on large selling though, as rain in the dryer parts of South America took the headlines after the USDA Report ultimately did not provide any major changes. The USDA did not change the U.S. yield for corn as it stayed at 177 BPA while raising total crop size to 15.115 billion bushels and 1.540 billion bushels for ending stocks. World stocks were lowered along with smaller yield numbers expected in South America. The rain will do ...
The Leonard Lumber Report: January 10
It's hard to believe that this market has reentered the hyperbole dynamic we saw last year when the market lacked any restraint in upward pricing. The market bottomed on November 2nd at $606 and has gone straight up since. On Friday, the March contract made a new high of $1,250. That is a run of over 100% during the holidays. So, what are the issues causing these spikes? First is the massive contraction of this industry, creating a buy pattern that is out of balance. There are fewer players in the pipeline, making it consistently tight. The other is the ...
AG MARKET UPDATE: DECEMBER 29 – JANUARY 6
Happy New Year! Volatility has been the main storyline in the first week of 2022. There was enough surprise rainfall in the dry areas of South America to spook the markets right before the New Year before a slight bounce. This week’s ethanol production numbers were slightly below last week. Compared to the previous year, monthly ethanol production is running 9% over last year, but ethanol stocks are 8.3% below last year. Ethanol margins are still profitable as gas has rallied since Thanksgiving. The dryness and heat in Southern Brazil and Argentina remain in the forecast while northern Brazil continues ...
The Leonard Lumber Report: 2022 Outlook
What a year. The housing industry plowed through 2021 with record disruptions and record sales. Once a pipeline issue was resolved, another would pop up. We are coming into 2022 with a tight supply and high demand for this commodity. Big dollars continue to flow into the economy, and now a house has reappeared as a valuable asset. There is also roaring inflation which is a double-edged sword for this commodity. The fact is the housing market is exceptional, and lumber prices are trending higher. The positives are firmly in place, while the negatives will need a dramatic economic shift ...
