Global grain and oilseed costs will moderate on increased production after drought in the U.S. slashed yields and boosted prices, Agriculture & Agri-Foods Canada said today.
“The 2012 U.S. drought dramatically reduced yields and had a significant price impact on world grains and oilseeds,” the government agency said in an e-mailed report. “The outlook anticipates a strong global supply response, which will reduce prices in the short term. Although prices will moderate, the medium-term outlook is for commodity prices to remain on a higher price plateau.”
The worst drought since the 1930s last year sent corn and soybean prices to a record as U.S. yields declined. Wheat on the Chicago Board of Trade surged 19 percent in 2012, the biggest gain among the 24 commodities tracked by the Standard & Poor’s GSCI Spot Index. Canola on ICE Futures Canada in Winnipeg rose 13 percent.
Net cash-income for Canadian farms reached a record C$13.1 billion (US$12.8 billion) in 2012, 14 percent higher than 2011, the government said in a separate report. The net worth per farm climbed to C$1.8 million in 2012 and is forecast to reach an all-time high of C$1.9 million in 2013, Agri-Canada said.
Farm income will continue to be “strong” in 2013 as a “promising” South America spring harvest and a normal fall crop in the northern hemisphere will increase supplies, the government said.
Livestock farmers probably had record incomes in 2012 amid higher cattle prices, Agri-Canada said. Cattle and hog price will continue to increase, and hog-farm income will rise 25 percent in 2013 as feed costs decline.