is part of the Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

  • American Agriculturist
  • Beef Producer
  • Corn and Soybean Digest
  • Dakota Farmer
  • Delta Farm Press
  • Farm Futures
  • Farm Industry news
  • Indiana Prairie Farmer
  • Kansas Farmer
  • Michigan Farmer
  • Missouri Ruralist
  • Nebraska Farmer
  • Ohio Farmer
  • Prairie Farmer
  • Southeast Farm Press
  • Southwest Farm Press
  • The Farmer
  • Wallaces Farmer
  • Western Farm Press
  • Western Farmer Stockman
  • Wisconsin Agriculturist
Corn+Soybean Digest

FASTEN Your Seat Belts


Decision making with marketing has never been easy. But most people will probably find that making decisions the next six months will be more difficult than normal.

Price volatility in both grain and livestock markets is going to be excessive. Keep in mind that volatility doesn't mean straight up — it means both up and down.

What's changed? In the past year there have been many significant changes impacting both grain and livestock farmers. Most are changes that few, if any, would have been able to forecast a year ago. Consider the following:

World Corn Stocks
(in million metric tons)
Year Beginning Stocks World Production World Consumption Ending Stocks Stocks as a % of Use
1990-91 132.5 482.4 473.90 140.9 29.7%
1991-92 140.9 491.4 491.80 140.5 28.6%
1992-93 140.5 538.7 515.50 163.8 31.8%
1993-94 163.8 476.2 511.50 128.5 25.1%
1994-95 128.5 560.3 540.40 148.3 27.4%
1995-96 148.3 517.1 543.50 121.9 22.4%
1996-97 121.9 591.2 568.80 143.9 25.3%
1997-98 143.9 575.4 580.90 138.6 23.9%
1998-99 138.6 605.3 581.90 172.4 29.6%
1999-00 172.4 606.8 604.43 171.5 28.4%
2000-01 171.5 588.3 605.40 153.9 25.4%
2001-02 153.9 599.4 621.72 129.8 20.9%
2002-03* 129.8 602.4 631.89 100.3 15.9%
2003-04** 100.3 609.8 633.66 76.5 12.1%
* USDA Estimate
** USDA Projection
Source: USDA
  • A year ago most soybean producers would have given almost anything for $6 soybeans. Now, as a result of the August drought, $7.50 soybeans seem cheap to many.

  • World carryover supplies of corn are now at the tightest levels in recorded history. Does that mean prices are headed higher?

  • Beef prices recorded new, historical, high price levels as a result of both a shortage of domestic beef and the closing of the borders to beef coming from Canada. Cattle feeders in the U.S. recorded the most profitable year in history. Unfortunately, this has not carried over to hog production.

  • With few exceptions, land prices continue to soar to new highs. Most of this was the result of low interest rates and a considerable number of 1031 (tax-free) exchanges.

What does this mean for marketing strategies? First, remember that marketing is a business of emotions. The same marketing strategy rarely works two years in a row, yet many people still base this year's marketing strategies on what they did right or wrong last year.

Those who sold soybeans too early last year “learned their lesson.” They're never going to sell soybeans early again. What they really learned was that they should not have sold soybeans early last year. It's going to be extremely important to keep emotions in check this coming year.

Do your best to learn from past mistakes but avoid repeating them in the opposite direction.

One of the most important issues we'll all have to deal with by this spring and early summer is attempting to determine whether the corn market will trade domestic or worldwide fundamentals.

The world has a shortage of corn, but we do not. In fact, the U.S. has corn stacked everywhere as this article goes to press. China needs corn, but will it buy ours? It hasn't in the past.

My best guess is that soybeans have already made their annual high. While prices will experience some rallies between now and the end of the summer, assuming a normal to above-normal crop out of South America, soybeans will trend lower most of the year.

But corn could be a different animal. This market will stay steady to strong until it recognizes what this spring's planted acreage is in the U.S. If the increase is sharp, look for corn prices to also trend lower into late summer. If we don't see a shift into more corn acres, then corn could show strength this year instead of soybeans.

Richard A. Brock is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report. For a trial subscription and information on Brock services, call 800-558-3431 or visit

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.