Grain prices will run at or near decade lows, keeping farm income in a slump, say Purdue agricultural economists. In the Purdue Agricultural Economics Report 2017, they say the average value of farmland in Indiana was $7,041 an acre, down by 13 percent from the 2013 peak because of weakness in the farm sector.
“The primary force behind the famland value decline has been the decline in crop production profitability,” said farm management specialist Craig Dobbins. Low commodity prices and tight profit margins limit farmers’ ability to bid up land prices.
Purdue economists forecast an average corn price of $3.45 a bushel and a soybean average of $9.50-$10 a bushel in 2017. For corn, the average price would be a decline from 2015 while soybeans would be higher, benefitting from a smaller crop in South America this year. Economist Chris Hurt said, “Market prices in the next few years will be in the process of adjusting acreage to cause increases in corn and wheat prices, but at the expense of more soybean acres and lower bean prices.”