Crop Cutbacks for 2009 Season
Change of plans for farmers for the upcoming growing season.
According to an article in WSJ, soaring fertilizer and seed costs, and sluggish demand for crops are forcing farmers to idle millions of farm acres this spring.
This will reduce much of the nation's major crops including the biggies like corn, wheat and cotton.
Preliminary data released by the USDA from a March 2009 Survey, reveals the planting forecast as follows:
| ||
| Crop | Acreage (in Millions) | Change from 2008 |
|---|---|---|
As you can see, the planting area for wheat, corn and cotton crops have been reduced considerably, with wheat and cotton being cut the most.
Also, not taken into consideration at this point, are the adverse effects of inclement weather.
This means exactly what you think for crop futures prices. Trading has already been impacted with bushel prices jumping almost $0.50 in some instances. The USDA predicts food inflation of 3-4% this year (although still down from 5.5% last year).
And, what's in store for consumers?
Higher prices on the nation's major food brands from meat and produce to packaged foods and beverages. The effects are simple... If corn is more expensive, starch prices and all related products and services are bound to change.
As the growing season approaches, more accurate details will be revealed. The USDA plans to survey farmers again in June regarding actual plantings.
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