Grain Prices Poised for Big Gains Amid Farmer Losses

The high cost of food is affecting farmers who are losing money due to record-high input prices. According to an American Farm Bureau Federation analysis, farmers growing major row crops will collectively lose $32 billion in 2027, up from an estimated $31 billion in 2026.

The industry's costs have skyrocketed, with fertilizer and fuel prices driving the losses. While farm-gate prices may not reflect these increased costs, they are absorbed by farmers in the short run, reducing net returns.

As a result, farmers are switching to more cost-effective crops like soybeans, which require less nitrogen fertilizer. This shift will change the math on what gets planted and could lead to a reduction in corn production.

Commodity investors know that 'the cure for low prices is low prices.' This means that when prices are low, supply decreases, and demand remains steady, causing prices to rise. With grains like corn and wheat underpinning much of the U.S. food supply, their prices will likely increase over the next 18 months.

To play the rising prices, investors can look at exchange-traded funds (ETFs) such as Teucrium Wheat Fund (NYSE: WEAT) or the Teucrium Corn Fund (NYSE: CORN). These ETFs have already seen a price increase since July and may continue to rise.