Files
Abstract
The recent rapid increase in commodity prices is not an unique event. It has happened
several times in the past. Commodity prices have always dropped, returning to a more normal
level. Production costs, on the other hand, follow commodity prices up but do not follow them
down. Net farm income has increased rapidly in most commodity sectors of agriculture. However,
production costs have increased substantially during the past few years. Those cost increases will
reduce net farm incomes in the future if commodity prices do not continue to increase.