News

Economist worried about a market “super cycle” reminiscent of 2012

A leading ag economist is worried about the resiliency of grain markets as prices hit multi-year highs.

Dr. David Kohl says a farmer recently told him a lot of money was left on the table by selling his soybeans too soon.

“What’s happening is oftentimes when we have a year like this, it just sets the marketing back for four or five years.”

Presenting during the virtual Minnesota Ag Expo Wednesday, Kohl said that pattern compounded with government ad hoc payments and market influence from Chinese demand and South American weather has created a super-cycle reminiscent of 2012.

“The other one lasted five years, 2007 to 2012 or ’13. This one I don’t see lasting too much longer because again, there’s a lot of these factors that are not stable.”

Kohl is concerned about the health of the livestock sector with grain prices at these levels.  He says to have a healthy grain industry, the livestock industry needs to be economically healthy.