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By Ryan McGeeneyThe Cooperative Extension ServiceU of A System Division of Agriculture
LITTLE ROCK — Producers in Arkansas and throughout the country are facing dropping
commodity prices as abundant stores of rice, grains and other products saturate the
market, economic experts with the University of Arkansas System Division of Agriculture
said this week.
Archie Flanders, assistant professor of agricultural economics for the division, said
the surplus comes after several years of increasing prices and high yields in crops
that can be stored year over year.
“After years of extremely favorable prices, last year we had somewhat of a decline,
and a further decline in prices this year,” Flanders said. “Right now, every crop
has an abundant supply, and every crop is affected, across the board.”
According to estimates released earlier in June by the U.S. Department of Agriculture,
global price projections for long-grain rice, for example, have decreased to $10-$11
per hundredweight from the 2014/2015 estimate of $11.90-$12.10 per hundredweight.
Cotton’s future appears uncertain, as the 2014/15 estimate of 60.5 cents per bushel
is now projected to either drop to as low as 50 cents per bushel or rise as high as
70 cents per bushel by year’s end, according to the USDA’s “World Agricultural Supply
and Demand Estimates” report.
Soybean prices are also expected to drop, from an original estimate of $10.05 per
bushel to a projected $8.25-$9.75 per bushel. However, Scott Stiles, extension economist
for the Division of Agriculture, said because of soybeans lower production costs and
higher market prices relative to crops like corn and cotton, growers in Arkansas and
other states will probably continue to shift acreage toward the legume for the time
Flanders said the flooding that has decimated grass and hay crops in isolated areas
of the state, including parts of Miller, Lafayette, Little River and other counties,
will have little effect on the broader crop market situation. A shortage of hay and
forage may affect cattle producers, looking to maintain their herds toward the end
of 2015, but relatively high beef prices should alleviate the financial burden, Flanders
Fruit growers are also less likely to be affected by the dropping commodity prices,
he said, because of the limited shelf-life of most fruit products.
“Being perishable, they have to be sold,” Flanders said. Stocks don’t build up year
Flanders said that two major programs under the Agricultural Act of 2014, commonly
known as the Farm Bill, will likely come into play for many producers in 2015: the
Price Loss Coverage program and the Agricultural Risk Coverage Program, both of which
distribute cash payments to farmers when commodity prices dip below an established
“This is exactly what these types of programs are designed for: To enhance revenue
during periods of low commodity prices,” Flanders said.
For more information on agricultural economics, visit www.uaex.uada.edu.
The Arkansas Cooperative Extension Service is an equal opportunity/equal access/affirmative
action institution. If you require a reasonable accommodation to participate or need
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appropriate office) as soon as possible. Dial 711 for Arkansas Relay.
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Media Contact: Mary HightowerDir. of Communication ServicesU of A Division of AgricultureCooperative Extension Service(501) email@example.com