Farm-gate prices for corn, soybeans and wheat, the three most widely planted crops in the country, “have declined sharply from record levels set in recent years and no quick price recovery is expected,” says the University of Missouri think tank FAPRI in an update of its agricultural baseline. The season-average corn price is not expected to rise above $4 a bushel until the 2018/19 marketing year, says FAPRI, which forecasts a soybean prices in the low $9-a-bushel range this year and next. Wheat prices are expected to average less than $5.25 a bushel through 2016/17.
Farmers will respond to prolonged low commodity prices by planting 4-percent less wheat and 2-percent less soybeans next year, while corn planting would expand by 2 percent. All told, plantings of the three crops would total 227 million acres in 2016, compared to 229 million acres this year. A survey of growers by Farm Futures puts three-crop plantings at 232 million acres, with soybean acreage, at a record 84.3 million acres this year, rising by more than 2 percent to 86.3 million acres in 2016.
“As retail prices for meat, milk and other products moderate, projected consumer food price inflation drops to 1.9 percent in 2015 and 1.3 percent in 2016,” said FAPRI. The 2016 rate would be the lowest since 0.8 percent in 2010. The 20-year average for food-price inflation in 2.6 percent annually. The USDA forecasts food inflation of 2.5 percent this year and next.