December 18, 2007

US farmers witness favorable trend with jump of grain prices

The sky-high prices for corn, soy and wheat, and a rise in the value of farmland, boosted the fortunes of US farmers this year.

The success on the farm comes at a time when the US congress is writing a US$286-billion farm bill that includes a first-ever crop revenue guarantee programme.

On December 14, the senate passed its version of a farm programme that would guarantee revenue for grain and soy growers come 2010.

Rising prices for grain are expected to push income from the country's two million farms to a record US$87.5 billion this year, up about 48 percent from 2006, according to a USDA forecast. The average household income - from farm and off-farm sources - of principal farm operators is forecasted to reach US$83,622 in 2007, up by 7.7 percent.

A key element in the flourishing industry is the global demand for corn as food, feed and a raw material for ethanol. Corn prices, at US$4 a bushel or more, are up more than 50 percent from two years ago.

Soy, another key food and feed crop, are commanding more than US$11 a bushel levels, last seen in 1973. Wheat prices pushed past US$10 a bushel this year for the first time in history.