Commodity market outlook bleak for 2016

Tom Hinde

"There's a big bear sitting on all the agriculture markets right now," reports Dr. Steve Amosson, Texas A&M AgriLife Extension Service economist. Commodity market news dominated discussions during the recent Amarillo Farm and Ranch Show. Dr. John Anderson, American Farm Bureau deputy chief economist from Washington, D.C., reported markets are in a transition phase. Plenty of carryover stocks, domestically and globally, along with flat export demand and a strengthening dollar are keeping prices low.

"There are a lot of people in this game besides us and with the dollar so strong, it is making it hard for us to compete," Amosson said. He also reported world wheat production has generally been moving up, but the last three years have been record production years. Both the European Union and the former Soviet Union have had excellent crops. Both regions are major competitors to U.S. wheat in the export market.

"The foreign markets have slowed down and production has caught up," Anderson said. "We've been on the positive side and now we are going through the negative - it's a challenging time." His outlook: feed grains and wheat are not good and probably getting worse in the near term, cotton will improve somewhat, but not enough to matter, and net farm income will be down. Anderson believes it will definitely be a tough marketing environment as farmers look ahead to 2016 planting decisions.