An abundance of crops that abused American farmers is declining, fueling an unexpected recovery in the US Farm Belt after years of agricultural recession.
Corn, soybeans and wheat prices have risen to their highest levels in more than six years as dry weather and strong export demand from China are draining US supplies.
Rising commodity prices are rippling through the food chain, soaring US farm income and increasing the outlook for a wide range of rural businesses, from grain merchants to equipment manufacturers and fertilizer suppliers.
At the same time, the cereal industry’s resurgence is driving costs and squeezing profit margins for food and fuel producers who consume massive amounts of U.S. corn and soybeans every year, and is likely to lead to increases in food prices for consumers, food executives say.
It’s a dramatic turnaround from recent years in which massive harvests increased U.S. grain supplies, dropping prices and draining farmers’ incomes. A wave of bankruptcies engulfed farms in the Midwest, followed by trade disputes and the coronavirus pandemic, deepening farmers’ struggles.