Reply #84: Poor Weather Pushes Prices Up for Corn and Soybeans

[Mojorabbit]

Poor Weather Pushes Prices Up for Corn and Soybeans
Prices for corn and soybeans jumped in commodities markets on Thursday after the Department of Agriculture said that the onslaught of bad weather, from heat and drought in some areas to heavy rains and flooding in others, would reduce yields for those critical crops.

Commodities experts said that would ultimately lead to higher prices to consumers for staples like vegetable oil, pasta and meat.

“The message, based on today’s report, is these higher costs should not be expected to abate any time soon,” said Bill G. Lapp, president of Advanced Economic Solutions, a commodity consulting firm that works with restaurant companies and food manufacturers. “It implies higher cost forthcoming and subsequent margin pressure, and at some point the need to increase prices at the retail level or on the menus.”

The report, based on a survey of farmers and visits to fields, predicted a national average corn yield of 153 bushels an acre, down from nearly 159 bushels in the government’s previous forecast. It also predicted a small drop in the number of acres of corn that would be harvested this fall.

http://www.nytimes.com/2011/08/12/business/corn-and-soybean-prices-rise-after-usda-report.html