According to Supply Chain Digest, prices of commodities are continuing a two-year decline through 2013 Q2. Prices of metals are the most significant, down overall by 15 percent since the beginning of 2013. The major commodities index now sits 24 percent under its peak in April 2011. Natural gas prices fell 6 percent in Q2, but still rests 12 percent higher than it began 2013. The price drops are partly blamed on the Fed backing off of the monetary easing program. This program is believed to cause inflation, so slowing the program could have the opposite effect.
The value of the U.S. dollar fell against three major world currencies, the Euro, Yen, and Yuan. On average, the U.S. dollar has dropped in value by 2 percent. This trend makes our exported goods more competitive, but also makes our imported goods more expensive.
Industrial silver saw the most significant drop in price, ending Q2 30 percent down. Platinum fell 16 percent, and zinc 10 percent for the year. Agriculture prices also fell by 1,8 percent during Q2, but prices for individual commodities prices varied greatly. For the year, agriculture prices have remained relatively flat, with soybeans and dry milk going up in price by 10 percent, while corn oil fell 19 percent, coffee fell 11.6 percent, and wheat prices fell 14.4 percent.
Energy prices are down by 6 percent for Q2, but are still up 12 percent for the year. This percentage includes prices for WTI, Brent oil, diesel fuel, and natural gas. Natural gas prices are expected to continue to fall, due largely to the opening of new shale oil reserves. Energy companies are running three shifts per day to reach these natural gas sources. The U.S. is still on course to reach energy independence by the year 2030, according to a recent survey by KPMG Global Energy Institute.