The Key to Higher Corn and Soybean Prices
As growers begin to take delivery of seed for the coming year, the price outlook for this year’s corn and soybean crop remains bleak. There is one issue that could help stimulate demand for and prices of the 2016 crop, and that is trade. With corn prices under $4 and soybeans under $9, Secretary of Agriculture Tom Vilsack is feeling some heat about dismal US farm exports and the lack of new programs to help stimulate demand, “I am cognizant that folks are concerned about the level of these prices.” Vilsack is pinning his hopes for price recovery on passage of the Trans Pacific Partnership trade deal, “I am optimistic about a recovery in farm prices if Congress can pass TPP later this year.”
But Congressional leaders say right now the votes re not there to pass TPP. US Trade Representative Darci Vetter says farmers need to start pressing lawmakers now if they want to get TPP passed later this year, “This is an election year, trade is a sensitive issue, so clearly this plays into those politics.” She said, however, if you just look at the calendar, you can see there is a very short time window to gain support for the agreement. “We need to start changing hearts and minds how.”
For example, Indiana Senator Joe Donnelly has not come out in support of TPP but says he is still studying the trade proposal. Vetter says farmers must begin now to tell their elected officials that TPP is one way to raise prices and improve farm income, “In the short time frame of a lame duck session, we don’t have time to change minds and push the vote across the finish line. So educating members of Congress and the public at large needs to begin now.”
President Obama is a strong supporter of TPP but may not be in office when the vote in Congress comes. When asked where TPP stands now, House Speaker Paul Ryan said, “Right now I don’t see the votes there for TPP, because I think the administration negotiated an agreement that has some problems in it, has some flaws in it; and they’re going to have to figure those out and work those out if they want to get the votes to pass it through Congress, which I just don’t see the votes there right now.”