Corn and soybean supplies will remain tight this year even as increased plantings set the stage for record or near-record harvests, U.S. Department of Agriculture chief economist Joe Glauber said Feb. 24.
Exports and ethanol demand are expected to grow, keeping corn prices near historic highs and squeezing profit margins for beef, dairy and pork producers, Glauber said during an address at the USDA’s annual Outlook Forum in Arlington, Va.
“Unless this year’s weather is better than normal or plantings increase more than expected, stock levels for corn and soybeans should see only modest rebuilding in 2011-12,” Glauber said. “This will likely mean continued volatility in those markets.”
Corn futures in Chicago rallied 52 percent last year as the U.S. harvest produced weaker than expected results and prices continued higher in 2011, reaching a 31-month high near $7.25 a bushel earlier this week.
Rapidly escalating feed costs are an increasing concern for beef and pork producers, who in early 2010 returned to profitability after the 2008-09 recession contributed to deep losses.
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