With oil prices over $70 per barrel, money is being pumped into the Concho Valley. Oil is the most widely traded commodity and is part of a vigorous bull market in commodities which started in March of 1999.
Jim Hughes says "demand from overseas plays a big part. We do not use all of ours. We export a lot of beef and grain."
Commodity prices are also pushed higher by weakness in the United States currency.
Jim Hughes says "a weak dollar gives us a chance to export more and they can buy more."
Global demand and a weak dollar has pushed an index of commodity prices up an average of twenty percent per year since 1999. Asian demand for U.S. beef is limiting supply in the cattle market.
Jim Hughes says "the numbers in the cattle market have tightened some. Anytime something is more scarce, it means a higher price."
Ethanol excitement has skyrocketed corn prices from 2.80 a year ago to 4.40. Corn prices have pulled back recently to 3.40. Milo prices track corn closely and have also pulled back significantly from their highs.
Jim Hughes says "in the Midwest corn belt, they planted an additional twelve million acres. People started buying corn that were not farmers."
The West Texas cotton crop looks very good. The expectation of a large harvest has dropped cotton prices from 70 cents to below 60.
Jim Hughes says "we have had great moisture. Some of these farmers would say, lets have some high nineties days, because we need some."
Successful agriculture is critical to the San Angelo economy.
Jim Hughes says "when the farmers and ranchers are making money, people are selling more trucks, selling more clothes, and building more houses."
Concho Valley agribusiness is flying high in 2007.
