Hello everybody out there in farm country. This radio commentary is brought to you by the National Corn Growers Association, CropLife America, and Renewable Fuels Association. They are all friends, supporters, and allies of a healthy farm economy and prosperous rural America. Thank you.
And now for today’s commentary –
I will be on the farm this week. Harvest is winding down. Corn and soybean yields are good – not a record but very much in line with expectations. Farmers face a perfect storm of problems as we wrap up 2022 and must now focus on 2023.
International Monetary Fund (IMF) Directors said – “All the world’s largest economies – Europe, China, and the U.S. are now slowing down, dampening demand for exports.” Our products are bought with dollars. The currencies of many of our customers are weak compared to our dollar. Therefore, they can’t buy as much. The bottom line is that the strong dollar makes it easier for the U.S. to buy from other countries, and the weak currencies of other countries limit how much they can buy.
We have a good crop that we want to sell, but we need to be able to transport it to the ports to ship. We have not had enough rain. Therefore, the water levels of the Mississippi River are so low that the movement of grain is slowing down. Yes – we have river problems, but on top of that shipping by rail has seen a big jump in price. Double the three-year average. Also, truckers are in short supply because of a labor shortage.
We have already had to pay almost twice as much for our fuel this year, and now OPEC agreed to cut oil output by 2 million barrels per day. That will be the biggest production cut since the Covid– 19 lockdowns. It is about time that President Biden did something to increase our own production of oil. Inflation is making food more expensive. Compared to one year ago. Meat is up 7.7%, dairy up 20.7%, grains up 11.3%.
On the farm we need to maintain better prices for grain and soybeans. As soon as we wrap up harvest, we will put nitrogen into the corn fields for next year. Let’s not forget the phosphate and potash. We can’t overlook the explosive rise in interest rates. Money borrowed to finance crop production in 2023 will cost so much more.
Last concern – the war in Ukraine, we don’t know what will happen.
Until next week, this is John Block reporting from Washington, D.C. If you would like to review my radio shows going back more than 20 years, just go on-line to www.johnblockreports.com.
