A few years ago, a city person — intelligent, but with little knowledge of agriculture — asked me a question about U.S. farmers and South American crop production. I don’t remember the conversation exactly, but it went something like this:
Smart city person: “There’s a stereotype that U.S. farmers pay a lot of attention to what’s happening in South America. Is is valid?”
Me: “For a lot of farmers, yeah.”
Smart city person: “Why?”
Me: :”Well, when farmers here are planting, farmers down there are harvesting. And when farmers here are harvesting, farmers down there are planting. And the farmers here and down there grow a lot of the same crops, especially soybeans. So what happens down there can have a big impact on U.S. crop prices, pushing them either up or down.”
Smart city person: “So farmers here want Brazil and Argentina to have poor crops, because that will lead to higher prices in the United States?”
Me: “Yep. That’s how farming works.”
Smart city person:. “OK, I understand the economics of it. But it doesn’t seem very friendly.”
Me: “Well, that’s how farming works.”
The National Sunflower Association’s latest electronic newsletter says that grain traders are expecting a big increase in South America oilseed production in 2013 — and that U.S. prices will strengthen if those expectations aren’t met.
Yes, it’s definitely safe to say that U.S. farmers once again are watching what happens in South America.