In its first look at the coming year for the farm sector, USDA projects two of the largest corn and soybean crops ever and continued low commodity prices that have pulled down farm income since 2013. In USDA’s most recent forecast, net farm income is forecast at $71.5 billion this year, the lowest in nine years. Outside experts expect little improvement in 2017.
A University of Missouri think tank estimates net farm income will rise by $1 billion in 2017, a marginal increase. Income would remain low through 2019 as farmland values contract and indicators of the financial health of the sector, such as the debt-to-asset ratio, deteriorate somewhat. USDA is scheduled to update today its estimate of farm income for this year. It will forecast 2017 income in February.
Farm-gate prices for corn and soybeans would improve slightly for the 2017 crops, says USDA in projections based on conditions this month. Offsetting the higher prices, however, would be smaller production than the record crops being harvested this year. The corn crop, projected at 14.060 billion bushels would be the third-largest on record but down sharply from this year’s 15.226 billion bushels. The soybean crop of 4.050 million bushels would rank second to the 4.361 billion bushels of this year.
Low commodity prices would discourage production and reduce demand for seed, fertilizer, fuel and pesticides and also keep pressure on farm income. USDA says planting of the eight major U.S. crops – wheat, corn, sorghum, barley, oats, soybeans, rice and upland cotton – would total 248 million acres in 2017, down by 2.4 percent from this year’s 254.2 million acres
Growers will plant a record 84.6 million acres of soybean in 2017 – up 900,000 acres from this year – while reining in corn and wheat acreage, said USDA. Corn plantings would drop to 90 million acres, down by 4.5 million from this year, and wheat sowings would total 48.5 million acres, down by 1.7 million acres from this year.
U.S. corn and soybean stocks are projected to fall slightly due to the somewhat smaller crops and continued strong demand for the two most widely grown U.S. crops. Farm-gate prices for corn were projected around $3.30-3.35 a bushel into 2020. Soybeans would run from $9.35-$9.40 a bushel in that three-year period. By comparison, this year’s corn crop is forecast to fetch an average $3.20 a bushel and soybeans, $9.20 a bushel.
To see the USDA crop and livestock projections for the next 10 years, click here.