article1 - By SCOTT KILMAN Major agricultural commodities...

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By SCOTT KILMAN Major agricultural commodities continued their extended run-up in price, underscoring how much of America's farm belt is booming even as the overall economy continues to struggle. Contracts for the delivery of corn and soybeans into mid-2011 jumped Monday by 5% and 2%, respectively, after rising their daily permissible limits on Friday, when the U.S. Department of Agriculture sliced production estimates by small percentages. Cash cotton prices rose 3.3% Monday after a 3.9% gain Friday. They are 86% higher than a year ago. Cotton Makes a Comeback For many crops, prices are climbing even as big harvests pile up, a rare combination. Farmland values are up while those for some other kinds of real estate languish. Debt on the farm is manageable. Incomes are rising. And trade, of which many Americans are growing wary, is for agriculture a boon. Asia's economic vigor and appetites make the farm sector's reliance on exports—once thought a vulnerability in some quarters—a plus today. "The farm economy is coming out of the recession far faster than the general economy," said Don Carson, a senior analyst at Susquehanna Financial Group, New York. Overall, the USDA projects net farm income to climb 24% this year to $77.1 billion, the fourth highest ever. In September, farmers were being paid 62% more for hogs than a year earlier, and 32% more for milk. The higher prices probably won't sting consumers at the dinner table as much as did a crop-price surge in 2008, when the consumer price index for food jumped 5.5%. With unemployment high and shoppers frugal, food executives are leery of trying to pass higher costs on. The USDA expects retail food prices to rise 0.5% to 1.5% this year, which would be the least since 1992, though some economists see these prices climbing
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This note was uploaded on 09/15/2011 for the course AG ECON 1114 taught by Professor Staff during the Spring '11 term at Oklahoma State.

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article1 - By SCOTT KILMAN Major agricultural commodities...

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