Syria Talk, Dry Spell Trouble Agriculture

September 9, 2013 10:00 AM
 
oil refinery

Two major storylines are challenging U.S. agriculture at the moment, experts tell the U.S. Farm Report Market Roundtable. The first is talk of possible U.S. involvement in Syria, which is creating volatility in the commodity markets. The second is a lack of rain, which is dragging crop conditions down in parts of the country.

On the Syria side of the equation, inputs are a concern for producers.

"We’ll go through it, but the market gets nervous and you build up this premium in crude oil, and then that affects a lot of things in agriculture, as you know," says Tommy Grisafi, Indiana Grain Company. "That’s one of the input costs, and it seems, at a time when some of the commodities are coming down in price, you hate to see those inputs go up. Everything that’s ever been delivered to your house has been delivered to you by a truck, and that all comes from crude oil and energy."

At the same time, Grisafi says, the ability of U.S. farmers to turn corn into ethanol might present an opportunity in the face of the oil dilemma.

"We’re going to have some corn crop here, and I think that demand is quietly building on the downside as the price goes down," he says.

Meanwhile, persistent dry conditions in the Corn Belt are going to hurt harvest yields, says Chris Barron, Carson & Barron Farms, Inc.

"We’re seeing corn yields, I would estimate, maybe as much as 7% to 10% reduction in yield that the market I don’t think has a handle on yet, and probably the same thing with soybeans," Barron says. "I think the market understands the soybeans are in trouble in terms of yield, but there’s a lot of secondary issues out there, as well."

Get the complete analysis on these issues and others by playing the videos below.

Watch Segment 1 of the U.S. Farm Report Market Roundtable:

Watch Segment 2 of the U.S. Farm Report Market Roundtable:

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