In many respects, the tone of the 2013 Purchasing Seminar sponsored by Milling & Baking News seemed an echo of the year before. While ingredient prices going into the seminar mostly remained well above historical averages, a situation that repeats several past years, ingredient buyers as well as most of the speakers in the program appeared to be cheered by downward price trends of recent months. As a whole, the group seemed to reflect a bias that the outlook was for further weakness.
Of course the similar optimism pre-vailing in early June 2012 was rapidly undone in the weeks that followed by the start of a withering summer drought that dashed expectations of a record corn crop and sent prices for major crops surging.
In the current year, optimism has been fed by early forecasts of rising stocks in 2013-14 and has been reinforced by a dramatic contraction in moisture-deficient U.S. cropland area as measured by the Palmer Drought Index. Still, the planting of 2013 crop corn and soybeans has hardly gone glitch free, creating serious doubts whether trend yields will be achieved. The raw experience from last year together with erratic early season weather in 2013 ought to inject a note of caution into the purchasing deliberations of even the most optimistic ingredient buyers.