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How do we raise grain prices?

Profit Matters 4-20-17

How do we get prices for grain to go higher?

John Block asks the question and gives a few responses.

He has interest in a farm in Illinois where yields have been high, year after year. The result of oversupply is lower prices.

“I can report from being on my farm last week that weather was beautiful. We planted 60 acres of corn, and then it rained. It’s always exciting when you first hit the field with hope and optimism for good crop,” Block said.

Looking at the other side of the equation: demand. Block addresses the issue of getting more trading partners to bid for U.S. grain.

“We need a good year. Farmers are looking for a way to lift their prices. Some think we should have more conservation reserve acres. We have 24 million acres of environmentally fragile land that is out of production now,” Block explained. “With less acres growing grain we can expect better prices and less soil erosion. Senator of South Dakota wants to pass legislation to raise the conservation acres from 24 million to 30 million.”

Block suggests increasing exports. World Trade right now appears to be in the hands of the buyer. South America is now exporting subsidized corn to the U.S. First boatload will be in from Paraquay next month.

“You have to start somewhere. Since we are not going to be a player in TPP, we have to get individual countries to open their markets. The question is how are we going to increase demand and lift prices? That’s a challenge.”

John Block’s comments are underwritten by Crop Life America and John Deere.