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Competitors are grabbing more market share

Competitors are grabbing more market share

The largest U.S. grain harvest in history has pushed prices to four-year lows, which usually means a sales bonanza for the world's largest food exporter.

Not this year, Reuters reports. Ukraine, Russia and other competitors are grabbing more market share. Plus the U.S. transportation system will struggle to handle the huge domestic crop production. That is driving down what farmers get paid by exporters, encouraging many to hold on to their crops in the hope that U.S. rivals will eventually deplete their stocks and bids for their grain will pick up.

"We're going to get this crop harvested, put it away, and our exports are going to pick up," said Jerry Mohr, president of the Iowa Corn Growers, who farms 1,100 acres of corn and soybeans near Davenport.

Mohr hauls his crops to a nearby elevator on the Mississippi River, where it is loaded on barges for shipment to export facilities at the Gulf Coast. He expects prices there to weaken in coming weeks when the mammoth crop clogs the pipeline. "There is going to be so much corn around and no place to go with it," he said.

Rail congestion caused by soaring demand for hauling crude oil by rail sent rates from the usual $200 to $300 per 100-ton rail car a little over a year ago to around $5,000 this harvest season. Barge costs for harvest time shipping hit records in some areas this year. "Agriculture has not paid that price before," said analyst Stephen Nicholson with Rabobank, a major farm lender.


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