Grain, Oilseeds to Moderate as Output Rises, Canada SaysKatia Dmitrieva and Tony C. Dreibus
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.