WSJ update on price pressures affecting U.S. grain prices.
December 10, 1999
Big World-Wide Surpluses
Keep U.S. Grain Prices Low
Associated Press
WASHINGTON -- Big world-wide surpluses of wheat, corn, soybeans and
other major crops continue to keep prices depressed for farmers, the
government said Friday.
The Agriculture Department said the price for this year's soybean crop is
averaging between $4.45 and $4.95 per bushel, 15 cents below its projection a
month ago. The average price two years ago, before the Asian financial crisis
sent commodity prices tumbling, was $6.47 a bushel.
The department also sees no recovery in the
price of wheat, which is averaging $2.45 to
$2.55 a bushel, or of corn, averaging from $1.60
to $2.
This year's corn and soybean crops are the third largest on record. Farmers
planted far less wheat this year than they did in 1998 but the reduction still
could not enough to offset heavy production elsewhere in the world.
Because of declining exports, the Agriculture Department expects wheat
supplies to exceed demand by 1.03 billion bushels on this year's crop, up from
818 million bushels last year.
Economists don't expect commodity prices to rebound next year unless there
are widespread crop failures.
Meanwhile, the cotton harvest is almost complete and it is 21% over last year,
when a drought destroyed crops all across the South.
The Agriculture Department expects farmers to harvest 16.9 million bales this
year. Texas alone is harvesting 5.1 million bales, up from 3.6 million last year.
The 1999-2000 orange crop is up 24% from last year. The harvest started in
October and will run into next spring.
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