(Ames) Chad Hart, Economics Professor at Iowa State University, says crop prices took an unusual pattern in 2020. Typically, crop prices rise from the first of the year into spring, peak out in early summer, and fall during the harvest season. Hart says this year; the markets flipped from their normal seasonal pattern.
Hart attributes the unusual rise in the grain markets to the derecho, the drought in parts of the U.S., South America, the Black Sea Region, and slower than expected growing supplies.
Hart says weather looms large in 2021. He notes drought conditions still exist in the U.S., and expects good grain prices to continue through the first half of this year.
Hart says grain futures show higher prices through the first half of 2021 and falling prices as we get closer to harvest.
Hart admits the drought conditions will be the driving factor in the markets. He says the drier we are; the higher prices will be this spring.
