Dairy prices are falling. Only cow calf producers seem to be looking at a profitable season, said Emmit Rawls, the livestock economist. Producers have been reducing the inventory of cattle due to low prices. Delton Gerloff, a crops economist, said corn and soybean producers should not expect big improvements in price this year because of the surplus of both of these commodities. If economies in the Far East improve enough for exports to rise, that could turn prices upward, especially for cotton, he said.
Weather plays a big role.
Extreme weather could lower production, causing prices to rise. The federal government might intervene, Gerloff said. The secretary of agriculture used to announce 'set-asides' that told farmers what percentage of their usual crop they could plant to prevent overproduction. If they overplanted, they weren't covered in cause of a disaster. The 1996 farm bill did away with set-asides in favor of the free market, Gerloff said.