Forecast & Trends
Reporting from the Commodity Classic, which was held last week in Tampa, Fla., Ann Duignan, equipment analyst for JP Morgan, says she had the opportunity to meet with U.S. Secretary of Agriculture, Tom Vilsack. She asked the secretary how the USDA would react to $10 corn, if for any reason, corn got to $10.
She reports that he responded that the USDA cannot say in advance how it would react as it could move the markets. However, he did go on to say that we should not underestimate the ability of the U.S. farmer to react to higher prices. He noted that farmers could do more double cropping, they could plant seeds closer together and drive up yields and he noted that the USDA is working hard to promote productivity in agriculture in other regions of the world.
Most other experts who Duignan spoke to believe that if corn gets to $10, the government will not intervene and will allow the market to decide where demand is rationed. Nobody believes that the government would implement export quotas or embargos.