Inflation is hitting agriculture hard. The cost of inputs like seed, fertilizer, and chemicals are rising much faster than core inflation. Because corn is more input intensive, this spring may see fewer acres planted to the crop than soybeans. While stocks fare poorly in inflationary periods, the rush of investment into commodities may not be a cure-all. The correlation of the price of corn to CPI changes is not great, which is why investment analysts advise capping investments in commodities at 3 percent of a portfolio. Duke University’s Campbell Harvey cautions that even gold is not a great hedge against inflation unless viewed over a very long period. In 1974, general inflation jumped to 11.1 percent, and the price of corn r...
What You Need to Know Today: Russia rejected calls for a ceasefire in the Black Sea, including a proposal to halt attacks on civilian shipping that could help restore grain flows from Ukrainian ports. Tyson Foods announced plans to permanently close its Joslin, Illinois, beef processing facili...
The big news in the cattle markets yesterday was Tyson Foods’ move to close two more beef plants. One of them, the Joslin, Illinois, plant was shuttered immediately after the announcement. The other, in Eagle Mountain, Utah, is a case-ready plant that does not slaughter cattle. Tyson also...
The Bureau of Labor Statistics (BLS) released the Consumer Price Index (CPI) on Wednesday. In July, the CPI rose 0.1 percent, seasonally adjusted, and rose 3.4 percent over the last 12 months, not seasonally adjusted. The index for all items less food and energy, or the “core” infla...
From WPI Consulting
Forecasting developments in production agriculture
On behalf of a private U.S. agricultural technology provider, WPI’s team generated an econometric model to forecast the movement of concentrated corn production north and west from the traditional U.S. Corn Belt. WPI’s model has subsequently provided quantitative support to a multi-million-dollar investment into short-season corn variety development. WPI’s methodology included a series of interviews with regional grain elevators and seed consultants. Emphasizing outreach and communication with stakeholders who possess intimate sectoral knowledge – on-the-ground insights – is a regular component of WPI’s methodologies, made possible by WPI’s ever-growing network of industry contacts.