What is in this article?:
- Commodity price volatility
- Interest rates bumping upward
- The good news is that commodity prices are high, but the bad news is that input costs also will be higher in 2011.
- Lenders also will be taking a close look at cash flow. They want to make sure you’ll be able to service any loans they put out there.
Volatility might be the only constant in commodity prices over the next several months, says Max Runge, Auburn University Extension economist.
“I’m confident of the fact there will be a lot of volatility,” said Runge at the recent Central Alabama Corn Production Meeting held in Autaugaville. “How we deal with and manage that volatility will determine how successful we are in the coming year.”
The good news is that commodity prices are high, but the bad news is that input costs also will be higher in 2011, says Runge.
“Fertilizer prices continue to ease up,” he says. “Nitrogen, phosphorus and potassium all are expected to be up over 2010. When I sit down and do budgets and try to come up with a price, nothing is easy anymore. It’s not as clear-cut as it used to be.”
Runge says he hesitates to discuss seed prices so far in advance of the growing season, but corn with some technology will probably be about $2.75 per thousand, cotton at $2 per thousand and soybeans at approximately 34 cents per thousand, all of which are higher than last year.