Economists expect crop yields
to boost economy
By Heather Mangold
City
Editor
Agricultural economists and local farmers are optimistic
about the market place and crop yields for the upcoming year. In fact,
some are predicting that Indiana could lead the Midwest in terms of
corn and soybean crop yields.
Chris Hurt, a professor of agricultural economics,
said he is anticipating that corn prices will average $2.10 per bushel
for 2001, a 25 cent increase from the 2000 market year. Soybean prices
are expected to increase 30 cents, going from $4.55 in 2000 to $4.85
in 2001, said Hurt.
"This is the first year we are seeing some potential
for prices," said Hurt.
Indiana may be one of the largest benefactors of
this upward trend with a current projection for record yields at 147
bushels of corn per acre in 2001, said Hurt.
Lt. Gov. Joe Kernan, Indiana's commissioner of
Agriculture, said in a press release,"The (United States Department
of Agriculture) crop report looks promising for Indiana producers. Hopefully
this will set the stage for prosperity for Indiana farmers who have
suffered economically in recent years."
Hurt said that the rising market price increases
will aid farmers in gaining additional income.
"Prices are determined by supply and demand," said
Hurt. "We are approaching a better balance where supply and demand are
much, much closer to each other.
In 1998, 1999 and 2000, market prices were at a
30-year low. Throughout the last three years, U.S. farmers have seen
world production exceed world consumption, thus making market prices
plummet.
In 1997, Asia, one of the United State's largest
buyers, experienced a financial crisis. As a result, Asian countries
were not buying as much from the United States and American farmers
suffered.
In addition to the struggle of foreign buyers,
the value of the U.S. dollar has been a contributing factor.
The strong dollar made it difficult for struggling
Asian countries with weak currencies to purchase our nation's crop.
And still those countries have not entirely recovered.
"Japan reached a 17-year low (on Sunday)," said
Hurt. "They have not totally emerged from the financial shocks of '97."
Alan Kemper, a Tippecanoe County farmer, is being
cautious with his anticipation for rising market prices.
"As a farmer, I'm watching commodity prices daily,
if not hourly," said Kemper. "So far today, at least, prices have gone
down significantly because of cool and rain in the Midwest."
Hurt added that prices in agriculture are dynamic,
and changing quickly.
In addition to monitoring market prices, Kemper
is concerned about foreign matters as well.
For Kemper, the North American Free Trade Agreement
is cause for concern.
"What concerns me as a producer now is currently
there is an issue about allowing Mexican trucks into the U.S. and whether
or not those trucks have to meet U.S. standards," said Kemper.
The Mexican government has told the United States
that if it does not allow its trucks to cross the U.S. border, Mexican
officials will cut off acceptance of U.S. corn into their country. Kemper
said that this qualifies as yet another issue that can affect the price
of his crop.
According to Lori Wallach, a spokesperson for the
free trade aggreement, nearly half of Mexican trucks coming across the
U.S. border have such serious safety violations that they had to be
put out of service altogether. Also, Mexican truck drivers are not required
to get minimum hours of sleep in order to be rested enough to drive
trucks safely, as American drivers are required. As a result, the United
States delayed the opening of the border between the two countries in
an effort to keep America's highways safe, according to a news release.
In 1998, Mexico filed a formal challenge of the delay before a North
American Free Trade Aggreeement panel and the panel is scheduled to
make a decision soon.
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