A crop surplus that has affected American farmers is decreasing, fueling an unexpected recovery in the US Farm Belt after a years-long agricultural recession.
Corn, soy and wheat prices have reached their highest levels in more than six years, as the dry climate and strong export demand from China drain US stocks.
Rising commodity prices are spreading through the food chain, helping to drive a sharp increase in U.S. agricultural revenue and raising the prospects for a range of rural businesses, from grain traders to equipment manufacturers and fertilizer suppliers.
At the same time, the revival of the grain sector is driving up costs and putting pressure on profit margins for food and fuel producers that absorb large amounts of US corn and soybeans each year, and is likely to drive food price increases for consumers, some executive foods say.
It is a dramatic reversal from recent years, when plentiful harvests have increased the US grain supply, pushing prices down and reducing farmers’ incomes. A wave of bankruptcies swept over Midwestern farms, followed by trade disputes and the coronavirus pandemic, which deepened farmers’ struggles.