Grain farmers are on the winning side of the food price rise that the World Bank estimates has pushed 44m more people into extreme poverty. At the Chicago Board of Trade, the prices of corn, soyabeans and wheat have respectively gained 90, 40 and 55 per cent in the past year.
High and volatile crop prices have also meant record profits for companies in the agricultural sector, including Illinois-based John Deere, the world’s biggest tractor maker by revenue, and Minnesota-based Cargill, the world’s largest grain trader.
In western Iowa the John Deere dealership that Don Athen manages received $174m in revenue during the past 12 months, twice the amount of five years ago. Many farmers ordering $300,000 harvesters, $200,000 tractors and $175,000 sprayers are paying with cash.
“Today the agricultural economy is at the opposite end of the spectrum from the general economy. The farmers are doing quite well,” said Mr Athen, whose company employs 190 people.
Soaring but unstable grain markets have raised fears of a bubble, especially in farmland values. A USDA survey to be released on Thursday is likely to reveal US farmers this spring plan to plant as many acres as possible, but it still may not be enough to tame higher crop prices. The US is the top exporter of corn, soyabeans, wheat and cotton.
Full article at FT
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