Grain price reality check

It gives me no pleasure to talk about the drop in grain prices that we’ve seen in the past few months. However, I’m surprised by the amount of denial there is. I run into lots of producers who believe this is a short term blip – just harvest pressure. They don’t accept that the bull market of the past couple years is over, or at the very least taking a break. Outside of agriculture, many people don’t realize how far a lot of prices have dropped. No one can predict the future with certainty, but the grain market is facing new realities. The stocks to use ratio is significantly higher on all the major grains. Production is again outpacing consumption. The price drop has been general across all grains, oilseeds and specialty crops. When prices are going up, everything tends to get swept along to one degree or another. The same thing happens when the trend is down. It’s hard for any commodity to buck the trend. Markets may not go much lower, but there’s a growing consensus that a substantial upturn is unlikely any time soon. The consensus could be wrong. Maybe prices will defy the odds and zoom back up, but I don’t think so. I think there’s a need to adjust price expectations and make decisions accordingly. I’m Kevin Hursh.