This could be a good year for president of Agri-Commodities,
grain farmers, according to some Inc , was made at last fall’s
economists, and that’s mostly Department of Agriculture
because of an ever-tightening Outlook Conference
world gram situation. His prediction is based on the
At least one observer says simple law of supply and demand,
there’s potential for a run-up in He says the world faces “an un
farm prices that will be the most precedented vulnerability to a
dramatic of the past decade That supply shortage.”
comment from Bruce Scherr, The commodities expert says the
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expected high prices will have
little impact on U.S. com exports,
which are expected to total 2.6
billion bushels during the 1980-81
marketing year. High pnces could
cut domestic com use for feed and
that may mean more wheat is
going to be used for livestock, and
it may also change some farmers
feeding patterns as they opt for
more grass and shorter feedlot
finishing periods.
Scherr expects the prospects for
strong prices next fall for both com
and wheat to be a strong
motivating force to get farmers to
plant all the acreage they can for
harvest this yea^.
Reports indicate farmers are
planning to harvest a sharply
larger wheat acreage, and early
thinking shows com plantings
could increase also
Scherr thinks it will take bet
ween four and six million ad
ditional acres of corn in 1981 to
meet the anticipated need.
“ft will be very difficult to
enough acreage to meet
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demand of the following crop
year,” he says.
As a result, he anticipates that
farmers may do more double
cropping as they harvest their
wheat as rapidly as possible and
then go to soybeans.
Higher farm prices are bound to
trigger substantially higher food
prices this spring and summei,
and that could mean more political
pressure to restrain exports and
thus protect U.S consumers.
Couple that with the potential for
actual food shortages in some
areas of the world and it could be a
very interesting marketing year.
Dawson Ahalt, chairman of the
Department of Agriculture’s
World Food and Agricultural
Outlook and Situation Board, feels
that disappointing world gram
harvests this fall would lead to
widely fluctuationg prices and
perhaps serious food shortages in
some parts of the world
He says those prospects are
possible because world grain
stocks have been depleted as a
result of crop shortfalls in 1980.
And that’s an interesting prospect
since the potential for shortages
comes just two years after the
largest global accumulation of
gram stocks in over a decade.
Ahalt says that only underscores
the fact that the. world food
situation is indeed fragile, that the
balance between too much and too
little food can tilt easily and
rapidly in a very short period of
time
get
the
Consider that in the early 1960’s
the world was in a much more
comfortable position in terms of
gram and food supplies. End-of
season wheat stocks back then
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Lancaster Farming, Saturday, April 11,1981-Dl3
represented about four months
utilization. Feed grain reserves
were at about a three-month level
But those were hard times for
U.S. farmers. The government was
storing burdensome surpluses and
farmers seldom got more than the
loan rate for then- gram.
Twenty years later, and it’s an
entirely different ball game The
experts say world grain reserves
have been steadily shrinking, with
an especially dramatic downtrend
m feed gram
The tightening world gram
reserve situation has serious
implications for U.S. farmers.
That happens because we have a
capacity to produce more gram
than can be used in this country,
and so over the years exports have
been steadily climbing.
Back m the early sixties when
world gram reserves were much
more generous we were exporting
about four billion dollars worth a
year. By 1970, that was up to
around seven billion, then m 1973
exports shot up dramatically to 17
billion dollars.
Even that is a small number
compared to today’s dollar value
of agricultural exports, which are
expected to reach an all-time
record of about 48 billion dollars
during the 1980-81 marketing year.
So bring on the warm spring
days and the gentle rainfall, and
hold back the embargoes and other
world strategies that affect far
mers.
It’s planting time, farmers are
anxious to get at it, and they would
much prefer good prospects for a
profitable crop year.
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