A new 10-year-outlook from the Organization for Economic Co-operation and Development (OECD) says grain and oilseed prices will decline over the next two years, but will rise over the long term.
"Prices are expected to decline over the next two years compared to the levels where they were over the past five, but prices are expected to slowly recover over the last eight years in the projection period," explains James Bryan, agricultural economist with Farm Credit Canada.
He says the report shows the factors that have been driving the ag markets over the last ten years will be similar over the next decade.
"We have rising populations, increasing incomes in developing countries and increasing urbanization, which will all contribute to increased demand," he notes. "The only thing is this increasing rate will be a little bit slower than over the last ten years because population growth is starting to slow down."
Cattle and hog prices are expected to remain around the levels seen over the last two years.
"So fairly high prices, and when you combine that with lower feed prices, that should mean fairly profitable years for cattle and hog producers," says Bryan.
Source: PortageOnline