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Competition threat, recession fears weighing on crop markets

A leading ag economist says grain production in the Black Sea region and general fears of recession could start weighing on crop markets.

The University of Missouri’s Pat Westhoff tells Brownfield Russia has produced a ‘huge’ wheat crop this year, while Ukrainian grain availability remains a question mark.

“What happens internationally with demand around the world an competing supplies, with countries like Ukraine, is going to be incredibly important going forward,” he said.

On the positive side, Westhoff says drops in international petroleum prices should lead to lower prices at the pump and lower costs for farmers. But he says not all input price drops are positive signals, pointing to past general economic downturn.

“It was not just bad for ag commodities, it was bad for every commodity; from petroleum to metals to you name it, it was all going down at the same time,” he said. “Why would that occur? Concerns about the general economy.”

Westhoff said even as crop prices are sharply lower than only a couple of weeks ago, they are still historically strong. Westhoff made his comments on Brownfield’s recent Weekly Commodity Market Update.