According to the University of Arkansas (U of A), the state's rice, soybean, corn and wheat producers are seeing record and near-record-high crop prices. Ag economists foresee the trend holding in 2008.
Eric Wailes, ag economist for the U of A system's statewide Division of Agriculture, says low worldwide stocks are driving the high prices. Demand for biofuel stocks and higher global demand for food crops are behind the low supplies.
The Food and Agricultural Policy Research Institute's (FAPRI) 2007 U.S. and World Agricultural Outlook forecasts varying price changes for different crops over the next 10 years. It projects wheat to level out above $4/bu. next year and the price of corn to steadily rise over the next 10 years. The report also projects soybean prices to rise slightly next year, then begin a gradual decline.
Wailes says the annual publication provides 10-year baseline projections of the ag economy based on assumptions about the general economy, ag policies in the U.S. and other nations, the weather and technological changes.
Higher costs have not diminished worldwide demand as in the past, Wailes says. He expects record agricultural exports for Arkansas and the U.S.
“The weak dollar has been great for agricultural exports because it make us more competitive abroad,” he says.