A different price environment is here

GRAYMONT – If you’ve paid attention to the markets lately, you’ve noticed we are in a different price environment than we were last year.

Ben Peters of Advance Trading presented a winter market outlook last week during a meeting hosted by Graymont Cooperative at the Graymont Town Hall. He noted prices are changing from a high price inverted structure and Brazil had a good crop last year.

“It’s an interesting environment for the elevator too,” said Peters.

Since this is an Election Year, that brings uncertainty to agriculture.

“Politically, things can change,” explained Peters. “There’s so much going on around the edges.”

Jobs are still gaining and the feds have to make sure to keep inflation tampered down through fiscal policy. The number of boats going through the Suez Canal is about half of what it was. Plenty of factors impact freight.

“Try not to get caught up on the data,” warns Peters.

We are seeing a global “de-coupling” from China and it’s not just the U.S. Coming out of inflation concerns, we did not have a recession but more of a soft landing, according to Peters, and the market likes that.

The U.S. crush has been very profitable, meeting global demand but the Chinese crush has been negative.

“Their economy isn’t recovering like ours. It’s still in a decline.”

Though China loves pork, we are starting to see chicken get more at the center plate. Chicken doesn’t require as much corn or soybean meal to feed – compared to pork or beef. If trends continue, China will need less corn meal and they are getting more GMO varieties there too.