2010 will be a much better year for agriculture. Mark my words. You have many good reasons for letting your optimism grow -- along with your strategic thinking.
This week, I finished preparations for February’s installment of the 2010 Northeast Ag Outlook written by intuitive ag economists at Cornell and Penn State. And hopefully, you’ve already read the fairly positive first installment in January’s American Agriculturist.
We have many reasons for a more positive agricultural outlook in 2010. Of course the die-hard pessimist will counter with: “Well, it couldn’t get much worse than 2009!”
And you and I would both quickly respond: “Oh yes, it could!”
The U.S. economy seems to be slowly coming back – despite what’s going on in Washington, D.C. That’s going to help consumer confidence rebound, and bring even more people back to fresh foods – a continuing “hot” trend.
Ethanol and exports will keep the heat on corn prices – which will keep the heat on soybeans. Two corn price game-changers are in the making in the Northeast. Once they’re in operation, the new ethanol plant at Clearfield, Pa., and the proposed 72,000-head cattle feeding/ethanol plant near Schroppel, N.Y., will significantly impact the East Coast corn basis. Catch the details in February’s issue.
Dairy farmers will be part of the recovery. While milk prices are finally on the rebound, Penn State and Cornell experts expect blend prices to average $17 to $18 a hundred in 2010. And if I’m correctly reading between the lines, those are carefully conservative projections.
Meat exports will be crucial to a “bullish” outlook for beef, hogs and poultry. The weak dollar compared to the euro and yen, was signaling a boom in exports. But Japan’s recent decision to close the door on U.S. beef dampens that outlook.
One important note
Catch up on crop fertility. As reported in American Ag, many Northeast and Mid-Atlantic farmers have cut back fertilizer applications over the last several years – so much that soil fertility reserves are beginning to compromise genetic yield potential. The fertilizer market is relatively soft at this point – a good time to buy. And we all know it’s not going to stay that way.
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