U.S. soybean stocks are expected to be excessive, rising nearly 400 percent above the level two years ago. USDA's Chief Economist Keith Collins speaking at the Ag Outlook Conference this week, says the jump is due to last fall's bumper harvests and strong competition from Brazil.
Keith Collins, USDA: "If the Southern Hemisphere crop materializes as expected, and the recent strength in soybean prices will turn to weakness in the second half of the year and into 2006-2007."
Wheat production in much of the Midwest and Plains regions continues to suffer from drought. This month, winter wheat condition in Texas was rated 89 percent poor to very poor.
U.S. cotton production is at an all-time high this marketing year, and stocks are expected to rise for the second year in a row.
All in all, Collins says the coming year will present more of a financial challenge for U.S. agriculture. He adds while demand remains strong, the farm economy will be challenged by issues like large stocks of crops, higher energy costs, animal disease and weather.
Keith Collins, USDA: "There is not an impending financial crisis in U.S. agriculture, yet there will be greater financial stress for an increasing number of producers in a number of regions."