2024 is now in the rearview mirror, but the impact of this season is still being felt. USDA economists say it was an eventful year with little market shocks to help pricing.
“We’ve gone through three or four years of unusual events which have significantly impacted the agricultural sector. We look over the last four years, you got trade friction with China, then you have pandemic issues, then you got a price run-up from the war in Ukraine, and then you’ve got perhaps some production shocks around the world, you have some countries like India putting export controls on rice. I think the difference in this year, then maybe perhaps the last several years, is the absence of a really big shock into the market, which allowed those prices to moderate,” said Seth Meyer.
What is done is done, and it is full speed ahead into 2025. Meyer says if any shocks come to the market, they would come out of South America.
“The big question is if we’re done with that moderation, where does the market sit in terms of its ability to respond to another shock? When you look around the world, I think that’s why we’re taking such a close look at South American production, Russian wheat production, etc. The market seems to be satisfied with where supplies are at the moment, and usually, you see a confluence of forces that put another shock into the market, at least on the supply side. It takes a couple of shocks combined to set off another price spike or for a big geopolitical event.”
Meyer says those geopolitical events can have an impact on either side, for better or for worse.
