IARN — Farmers Business Network (FBN) chief economist Kevin McNew is encouraging producers to “strike while the iron is hot.” McNew cites positive headwinds, which may benefit producers in 2021.
Commodity prices remain strong, a couple weeks into the new year. McNew encourages producers to take advantage of the higher prices.
“Strategically start to think about what your planting decisions are and taking price levels we haven’t seen in quite some time and locking those in,” McNew says.
McNew fully anticipates “an acreage war” over spring plantings. However, he believes great opportunities lie within soybeans, which “have a lot of upside.”
“The issue with South America’s bean crop is not fully registered with USDA yet and China’s appetite is rock solid. I think beans are going to look to buy some acreage in the next couple of months, as we get closer to spring,” McNew says.
U.S. Department of Agriculture (USDA) officials Tuesday made adjustments to soybean ending stocks, due to strong export demand and crush, which show no signs of letting up.
“There’s reason for this soybean market to be trading 14-dollars right now,” McNew says. “I think the market’s job in the coming months is to keep accelerating prices until it starts to see signs that the crop in South America is not so bad or starts to see demand ratchet back.”
McNew encourages producers to “keep a pulse on the market” moving forward.
“Keep a pulse on the market, know your cost of production, and know where you want to pull the trigger. The markets are moving fast. We’re going from days of five- to 10-cent moves to now 20- to 30-cent moves. Don’t just sit on your hands. Start making decisions,” McNew says.
Story courtesy of the Iowa Agribusiness Radio Network
