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Demand is key as commodity prices projected to be flat

The chief economist for USDA says another year of big production will put added emphasis on the importance of trade. 

Rob Johansson says 2017 will look a lot like 2016.  “At least right now – looking forward – we’re in a pretty flat situation,” he says. 

Johansson says there’s potential for another year with record production and increasing ag trade remains a key component for price support in the ag economy.

Mexico, China, and Canada are the largest US trading parters and account for about 45 percent of its exports.  “We can see improvements in our trading agreements,” he says.  “With Canada, Mexico, and China, but also other trading partners.  I expect the bilateral trade negotiations to start relatively soon and hopefully improve our market access to a lot of those developing countries.”

Looking ahead to the 2017/2018 marketing year, he says corn prices are projected to be up slightly at $3.50 per bushel a decline of nearly 50 percent from the record highs of 2012 and the price outlook is similar for soybeans. “Soybeans are forecast at $9.60 per bushel,” he says.  “Up about 1 percent from last year and 35 percent from the record in 2012.”

Johansson says meat and poultry production is expected to exceed demand and the USDA projects lower prices for cattle and hogs and flat prices for poultry.  As for dairy – USDA projects an increase in milk prices by almost 11 percent.

AUDIO: Rob Johansson, USDA Chief Economist

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