Is the "gold rush" in grain about to come to an end?
Rick Browne, CHS senior vice-president, for grain marketing, raised that question at the recent Prairie Grains Conference in Grand Forks, N.D.
High prices aren't going to fall tomorrow, next week or next month.
But Browne, who has more than 30 years in the grain marketing business with CHS, says there several things point to the possibility that current high grain prices may not last forever.
One is the fact that the grain market has always been cyclical. Talk that agriculture has reached a new plateau in grain prices may be just that – talk.
People who have a long history in the industry know that grain prices cycle, he said.
Two is possibility that several things could happen on the supply and demand side that would flood the world with grain.
World population will likely continue to grow, but some people are now talking about when it will level off and perhaps start declining.
A change in China's population trend line trend may come as early as 2013. Because a 1 child per family limit has been imposed for the past 15 years, China is going to grow old and less progressive quickly, he said.
A slowing of the world economy could also significantly reduce the demand for high priced corn and soybeans.
Also, high prices will force buyers to look for alternatives. Already, there is a big shift from corn to feed wheat happening in the market, he said.
More good farmland around the world, especially in Brazil and Russia, is likely to come into production. Developers include American farmers who are expanding their operations overseas.
Browne said that another 1 billion bushels of grain could be produced wordwide.
"In others words," one questioner in the Prairie Grains Conference audience asked, "you are saying we could have a lot more competition in the future?""Exactly," Browne said.