By Ryan Hanrahan
Successful Farming’s Chuck Abbott reported at the end of last week that “after soaring at the start of this decade, season-average prices for the three major U.S. crops will drop to pre-pandemic levels and stay there for the near term, said a University of Missouri think tank on Thursday. Cattle would be the most notable exception to an overall decline in crop and livestock values.”
“‘Assuming average growing conditions in future years, projected prices remain near 2024/25 levels for many crops,’ it said,” according to Abbott’s reporting. “‘Between 2025/26 and 2029/30, corn prices average $4.12 per bushel, soybeans average $9.98 per bushel, and wheat prices average $5.70 per bushel.'”
“Those would be the lowest farm-gate prices for corn and soybeans since the 2019 crops and the lowest for wheat since the 2020 crop, according to USDA data,” Abbott reported. “Lower commodity prices and rising production costs are forecast by the USDA to pull down net farm income, a measure of profitability, this year. While farm income has fallen sharply from its peak in 2022 during the commodity boom, it will remain far above its 10-year average, the USDA estimated in February. An updated forecast is scheduled for Sept. 5.”
“With a record soybean harvest on the horizon, FAPRI projected that this year’s crop would sell for an average of $9.99 a bushel, and that the expected bumper corn crop, the second in two years to top 15 billion bushels, would sell for an average of $4.10 a bushel. Earlier this month, the USDA said the season-average prices would be higher — $4.20 a bushel for corn and $10.80 for soybeans,” Abbott reported. “‘Increased supplies, a strong dollar, and several other factors have caused prices for many agricultural commodities to fall sharply from their 2022 peak levels,’ said FAPRI. ‘In the absence of new shocks to the weather, the macroeconomy, or policy, projected prices generally remain near current levels over the next five years.'”
“Cattle prices would remain strong through the end of the decade due to high consumer demand and constrained supply, said FAPRI,” Abbott reported. “Hog prices would begin to improve in 2026 as hog slaughter slows. Poultry production would rise modestly through 2029. The all-milk price would run slightly below $21 per 100 pounds of milk.”
Crop Futures Remain Low, Too
Bloomberg’s Gerson Freitas Jr. reported that “grains futures are at their cheapest in 14 years relative to other commodities as the prospect for ample supplies weigh on prices.”
“A gauge for contracts of soybeans, corn and wheat traded in Chicago and Kansas have plunged to the lowest valuation since 2010 relative to the other groups of raw materials in the Bloomberg Commodity Index,” Freitas Jr. reported. “…Grains have been the weakest link in major US commodity markets this year. The move comes as Midwest farmers seem on track for a bumper harvest, with abundant rain and mild summer temperatures aiding crops and underscoring the outlook for ample global inventories. Also undermining prices, demand for US supplies has been slow, with outstanding export sales of corn and soybeans for delivery in the marketing year starting next month trailing the average for the past few years. ”
“US farmers are poised to harvest roughly 15 billion bushels (381 million metric tons) of corn and a record 4.7 billion bushels of soybeans this year, according to an estimate released Friday by Pro Farmer after its annual crop tour,” Freitas Jr. reported.
Source : illinois.edu