“The commodity market is bringing a lot of money into the ag markets,” shared Sarina Sharp at the winter gathering of the Wisconsin Association of Dairy Plant Field Representatives. “Investors want to own commodities,” she went on to say, explaining that strong commodity markets and price movements have attracted investor money from outside of agriculture.

Given the market outlook, this influx of money could be here to stay for some time.

“Feed costs are likely to remain high until big crops are assured,” said the editor of the Daily Dairy Report. That big crop could come from South America or North America, but it will likely be in North America given the current crop conditions in South America. The crop market forecast applies to both corn and soybeans.

“We could have plenty of grain, assuming normal weather in the U.S. As far as I can tell, we are not going to see a reduction in corn acres. However, soybeans are like to be scarce,” Sharp projected. “In fact, soybeans markets look very bullish.

“We haven't seen dairy quality hay prices this high in some time,” she said, pointing to a graph on the screen when speaking to the Middleton, Wis., audience. Sharp added that there will not be an influx of alfalfa hay acres, so hay prices will remain on the high side.

The wild card is crop inputs.

Those inputs look to be on the scarce side for the foreseeable future.

“Commercial fertilizer will be expensive and may even be difficult to find,” she stated. “Fortunately, dairy farmers produce manure. It's a real win for dairy producers when it comes to offsetting commercial fertilizer costs. It’s a tremendous asset.”