Crude Oil
Primary Source: Canada
Last summer, oil soared to a price of $147 per barrel. By fall 2008, the price fell to less than $70 amid the financial crisis. David Maloni says to expect crude oil to stay at an average between $60 and $80 a barrel in the foreseeable future. Depending on the condition of the dollar, it could even touch $50 for a short period.
Corn
Primary Source: United States
From a high of near $7 a bushel in summer 2008, prices declined to $3.53 in the fall. Wedemeyer foresees prices averaging in the range of $3 to $4.50 per bushel, for the next couple of years, even if they temporarily spike from time to time. Maloni’s price predictions are also around the $3.50-per-bushel range, barring extreme weather or other crop problems and as long as $60 to $80 per barrel oil prices keep ethanol demand high. This is compared with the $2.50-a-bushel average corn prices over the last 30 years, Maloni says.
Oats
Primary Source: Canada
Because prices for oats do not meet the levels of other crops such as corn and soybeans, many farmers are less likely to dedicate much acreage to this grain. However, Wedemeyer believes prices should pick up in line with increased demand to fill the corn gap. Traditionally oat prices trend somewhere between $1.50 and $2 a bushel. By the end of 2008, they were $2.88. Wedemeyer predicts the average price should increase to somewhere between $1.50 and $2.50 per bushel.
Wheat
Primary Source: United States
Despite unfavorable weather conditions in the Midwest and Australia earlier last year, global wheat crops were strong. Ending stocks—calculated by taking supply and subtracting demand to determine what will be carried over into the next year—continued to grow each month. “There’s a lot of wheat out there,” Maroni says, although some acreage is expected to be lost to corn and soybeans over the next two years. During that period, he expects prices to remain about $6.50 a bushel.
Sugar
Primary Source: United States
Sugar projections for the U.S. are strongly interrelated with projections for Mexico since, as of January 1, 2008, duties or quantitative restraints on sugar or high fructose sugar trade between the two countries were suspended according to the North American Free Trade Agreement (nafta). Because sugar is being used in the production of ethanol in South America, prices are expected to be pushed up over the next year. Wedemeyer expects sugar prices to continue their downward momentum for the first part of 2009, hitting a low level of $9 before moving back up to $12 near the end of the year.
Cocoa
Primary Source: Cote d’Ivoire
According to a September 2008 report from Reuters, the 2008–2009 cocoa crop is expected to be down 7 percent from 2007–2008 due to the effects of black and fungal disease. Over the past three or four years, cocoa prices rose to a high of close to $3,000 per metric ton. Wedemeyer expects those prices to remain stable for the foreseeable future.
Coffee
Primary Source: Brazil
Wedemeyer predicts prices will move between $0.90 to $1.25 into 2009 before tapering off seasonally into the $0.90 range in the third quarter, coinciding with the stabilization of the U.S. economy. Like cocoa, many Americans view coffee as an item they don’t necessarily need, leading to decreased demand and prices.
Cattle
Primary Source: United States
The USDA predicts cattle (choice steers) prices will rise to $93–$100 in 2009 from an average of $93.97 per counterweight, a trading unit weight equivalent to 100 pounds.
Hogs
Primary Source: United States
The USDA “Livestock, Dairy, and Poultry Outlook” forecasts prices for 2009 to range from $48–$52 per live hundred weight, up from an average of $49.11 in 2008.
Chickens
Primary Source: United States
Broiler chicken prices should range from 81-88 cents per pound in 2009 from an average of 79.2 cents in 2008, according to the USDA.