Approximate Net Recovery on Cost
Crop Production: 80%-90%
- Industry Revenues: $205 billion
- Major Product Categories: Corn, Soybeans, Fruits and Nuts, Wheat, Vegetables, Melons, Cotton, Potatoes
- Significant Companies: Dole Food Company, Chiquita Brands International, Sunkist Growers
- Recent Sales Trends: The consumer price index for food, an indicator of agriculture crop values, increased 1.6% in January 2013 compared to the same month in 2012.
Acreage Down: Despite high corn prices, some U.S. farmers will rotate crops from corn to soybeans in 2013, hoping to prevent losses due to drought. Recent increases in corn prices motivated many farmers to plant corn year after year, but the practice has exacerbated the effects of the drought. Lack of crop rotation can deplete soil nutrients and reduce yields. High prices often failed to offset yield reductions, prompting some farmers to look to soybeans. Soybeans are less dependent on moisture and naturally add needed nitrogen to the soil. Many farms in the top corn producing states, are expected to switch to soybeans, and U.S. corn production may dip by as much as 320 million bushels in 2013, according to Reuters. Corn plantings are expected to remain near historically high levels, however.
Industry Impact: A shift from corn to soybeans by more U.S. farms could reduce corn supply and push prices up even higher, especially if dry weather persists into the growing season.
Industry Regulation: Approximately 90% of corn and cottonseed and 94% of soy grown in the U.S. is genetically engineered ("GE"). A campaign made up of approximately 400 organizations supporting consumer rights and food safety has lobbied the FDA to require labeling for GE foods. The agriculture industry is also facing increased scrutiny from the USDA and EPA over the use of pesticides that contribute to pollution.