Grain is gold
Date posted: November 23, 2010
Some key farm prices are at lofty levels. What’s bringing this good news to the farmers? N.C. State University extension economist Mike Walden responds.
“If you look around the economy right now and you say what sector is perhaps doing better than the rest of the economy, the ag sector — farming — is doing much better. And it is because we are seeing the prices for many of the crops — for example, grain prices are moving toward record highs; cotton the same way. And this is obviously putting more money in the farmers’ pockets.
“Those farmers are actually able to use that money, for example, to go out and buy new equipment. So the farm equipment dealers are actually doing well. And then it works its way all down the line. The sales of seeds, grain handlers, food processors are all benefiting from these higher prices for some ag commodities.
“Now what’s driving this is foreign exports. We are in the midst of a foreign export boom for agricultural commodities. Now some economists, though, are throwing up a flag of caution and saying, ‘Enjoy it while you can, because historically commodity prices have wildly fluctuated. And just as they have gone up very rapidly they could in the future come down.’”
Category: Economic Perspective