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Jul. 8, 2011 Source: Agri Marketing magazine Editor's note: On January 10, 2011, Agri Marketing made the following predictions. So far, 42% of them have been realized. See notes following each. While the Agri Marketing editors have no inside knowledge of any of the following predictions, we thought it would be fun to speculate on what some of the 2010 headlines may be. 1. The fragile U.S. economic recovery is slowed by record high energy costs. Oil tops out at $125/barrel and gas reaches $4.25/gallon at the pump. U.S. GDP growth, originally forecast at 2.4%, is a disappointing 1.2%. Unemployment, currently at 9.4%, drops to 9.1% at the end of the year. UPDATE: 2 for 4. Oil topped out at $114/barrel, gas reached $4.25 in several areas of the U.S., GDP for the first was +1.9% and unemployment stands at 9.1%. 2. Banks begin the year with an estimated 1,000,000 foreclosed properties on their books. Rather than dumping them on the market and further deflating real estate and home prices, they slowly release them, which continues to put a lid on prices. To provide support to the banks for taking this action, the Fed maintains its policy of increasing the money supply and provides an additional half trillion of bonds. UPDATE: 1 for 1. First part of this prediction is true. The second part is yet to be seen since it is tied into Congress' raising the nation's debt ceiling. 3. Inflation is back and jumps 2% for the year. The ending prime rate rises from its current level of 3.25% to 4.5%. UPDATE: 1 for 1. Inflation for the first quarter was 2.63%. The second part of the prediction will be known at the end of the year. 4. Ag commodity prices remain extremely volatile. Corn trades in the range of $7.00 to $4.25/bu. Soybeans trade from $14.95 to $9.50/bu. Wheat (HRW) $9 to $6.50/bu. Cotton $145 to $110. Fed cattle $115 to $85/hwt, hogs $85 to $70. Dairy prices show some recovery and milk is up 15% for the year. UPDATE: 2 for 6. Corn has ranged from $6.10 to $7.99/bu, Soybeans $12.38 to $13.98/bu, Wheat $7.20 to $9.96/bu, Cotton $1.10 to $1.45/cwt, Cattle $1.02 to $1.22/lb, and Hogs .88 to $1.02/lb. 5. Final planted corn acres are 90 million and planted soybean acres are 80 million. UPDATE: 0 for 2. Last week USDA estimated 92.3 million acres of corn (but will re-survey some areas) and 75.2 million acres of soybeans. Tweet |
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