We are following up on a forecast made by the U.S. Congressional Budget Office and posted here on Thursday, January 8, 2009.
Original post:
Watch that Pacific Decadal Oscillation. A New York Times archive search for the term "crop failure" returns 1950 hits, with a preponderance of stories written during the cool phase of the PDO. With the interconnectedness of the world's grain markets, a failure anywhere would raise prices everywhere.
(more on this follows the headline story)
From Bloomberg:
Corn prices that reached a record $7.9925 a bushel last year are headed for a decade-long slump below $4 as production in the U.S., the world’s top grower, catches up with demand, according to congressional analysts. The average cash price will bottom out at $3.65 in the 2012-2013 marketing year, then rise no higher than $3.94 through 2019, the analysts from the Congressional Budget Office said in a document used as part of a government-wide estimate of federal spending over the next decade. Corn futures closed today at $4.165 a bushel on the Chicago Board of Trade.Let's see how they did:
Wheat and soybean prices paid to farmers will also stagnate, according to the nonpartisan CBO. The average cotton price will rise from 40 cents a pound this year to more than 60 cents by 2011, the CBO said. The report doesn’t estimate high or low prices for the year, only averages.
Corn prices are expected to stay low even as total use rises 18 percent to 14.719 billion bushels by the end of the next decade. The analysts forecast production jumping 23 percent to 14.738 billion bushels, as a 15 percent gain in yields absorbs rising demand for the grain for exports and as a source of ethanol. Corn is the biggest U.S. crop, valued at a $52.1 billion in 2007....MORE
369.75 last
Hmmmm.....methinks I should maybe wander over to the CBO and inquire as to their latest thinking.
