The COVID-19 coronavirus has caused much volatility in the markets. According to crop economist Frayne Olson, “Now, it has become a consumption problem as well as a production problem...so the biggest concern right now is on the demand side.” This has has caused a drastic change to typical supply and demand.
Olson goes on to state that he is certain grain prices will bounce back in no time. He adds, “Grain prices will rebound much faster than crude oil or stock prices in general.”
It is suggested that strategic marketing plans are the best way to battle a volatile market. “Having a plan in place really helps to take some emotion out of your marketing and helps you to execute,” according to Pat Kroese, the director of Grainbridge Business Development. He concludes that having a flexible plan will help with one’s margins, especially while focusing on a busy production.
Two other factors that will help during these times will be the USDA’s Planting Intentions Report coming out March 31st and the lower interest rates that will strengthen land values.
For all updates on the Coronavirus and how it impacts Rural America, visit our Coronavirus outbreak hub.
