Soybeans will sell for less than $10 a bushel, on average, at the farm gate for three years in a row, projected a University of Missouri think tank, because another large crop is likely to follow this year’s record-setting harvest. The 2015 crop could fetch an average $8.93 a bushel, the lowest price since 2006/07 and $1 less than this year’s crop, said the Food and Agricultural Policy Research Institute.
By comparison, corn prices, dragged down by back-to-back record crops, are projected to begin to recover with the 2015 crop. FAPRI estimated this year’s crop will sell for an average $3.40 a bushel, with the 2015 crop bringing $3.74 a bushel. Two years ago, corn and soybean prices set record highs due to drought. The return to large crops is a boon for livestock feeders and ethanol makers. It also will hold down food inflation. Corn and soybeans are used as raw ingredients in an array of processed foods from cereal to salad oil.
FAPRI said the farm-gate price for soybeans would top $10 a bushel with the 2017 crop, forecast to average $10.26 a bushel. The think tank projected season-average prices for two dozen crops for each year of the 2014 farm law. Growers can use the data in deciding which subsidy program is best for them, the revenue-protection of Agricultural Risk Coverage or the target-price payments of Price Loss Coverage. PLC has reference prices of $3.70 for corn, $8.40 for soybeans and $5.50 for wheat.
“Different expectations about future crop prices will lead to different expectations about future payments under the program,” said FAPRI.
Corn, sorghum and long-grain rice are the crops most likely to trigger subsidy payments for 2014, said economists Carl Zulauf and Gary Schnitkey at farmdoc daily, but the size of payments depends on whether a farmer opts for ARC or PLC and on the average price. “Simply put, it is too early in the 2014 crop year to talk with much certainty about the size of payments. It is reasonable to say that 2014 crop year payments may occur, that they may be large if the right combination of price and yield materialize, that they will likely vary by crop, and that they will likely vary by program for a given crop,” they said.