Kurt Guidry, Blanchard, Tobie M. | 8/19/2006 1:43:44 AM
Weather conditions are leading to spikes and declines in crop prices, and those changes affect Louisiana farmers, as well as others across the country, LSU AgCenter experts say.
Cotton is just one crop that serves as an example. Experts say dry weather threatened Louisiana’s cotton crop early in the growing season, but timely rains have helped the crop rebound. In other parts of the country, dry, hot weather persisted, and the cotton crop is suffering.
"About 38 percent of the U.S. cotton crop is rated as good to excellent condition," said LSU AgCenter economist Dr. Kurt Guidry. "That compares to last year at this same time when we were at about 61 percent."
Because of the dim outlook for the nation’s cotton, prices rose to 57 cents a pound. This price is significantly higher than the five-year average of around 44 cents. As weather moderated in some areas, so did prices, however, and Guidry says cotton was trading closer to 55 cents a pound in mid-August.
"Once we start getting those harvesters in the field, and we don’t have the kind of yields USDA is projecting, we could see prices move higher," Guidry explained.
The weather is affecting the price of other crops besides cotton. Corn was trading around $2.70 cents a bushel, a higher than average price for corn, and soybeans prices were near the average price of $6.20 a bushel.
"We have really seen those prices for corn and soybeans fall relatively dramatically over the past two or three weeks," Guidry said this week (Aug. 16).
The price of corn fell to $2.30 a bushel, and soybeans were trading around $5.60 a bushel in mid-August.
These changes in price affect the way growers market their crops.
"They might want to look at doing something that is going to protect their counter-cyclical payments," Guidry said. "As prices move higher, the counter-cyclical payments they receive are going to be reduced."
Guidry says producers can expect to see fluctuating prices as the market reacts to changing weather patterns. The good news, he says, is that with cotton and late-planted soybeans, there is still time for prices to climb, since growers haven’t started harvesting those crops yet.