The season-average prices for most U.S. agricultural commodities are on a decline that could persist into 2026, said a report from the FAPRI think tank at the University of Missouri. Global economic growth has slowed after a heady recovery from the pandemic in 2021, and world grain production is up this year, creating more competition for U.S. crops.
The cost of price supports for dairy, and for an array of field crops, could skyrocket if Congress allows the 2018 farm law to expire without a replacement, estimated the Congressional Research Service.
The farm-gate value of U.S. corn and soybeans, the two most widely grown crops in the country, will fall 16 percent compared to last year's harvests due to a steep drop in commodity prices, according to USDA data. The season-average price for corn was forecast to be $1.70 a bushel below the near-record prices paid for the 2022 crop, and soybeans were expected to be $1.50 a bushel below last year's price.
The FAO index of global commodity prices rose 1.3 percent during July, its second increase since April, reflecting the termination of the Black Sea grain initiative and India's restrictions on rice exports. The increases punctuated a longer-term decline in commodity prices in the past year.
Higher enrollment in SNAP and lower commodity prices will boost the 10-year baseline for the farm bill to $1.48 trillion, the most expensive ever, said the Congressional Budget Office in an updated projection of federal spending. The baseline sets the limit for spending in the new farm bill. …
American farmers will plant 7.6 million more acres of corn, soybeans and wheat, the "big three" crops of modern U.S. agriculture, this year than last, according to USDA estimates. With normal weather and trend-line yields, the result could be the largest soybean crop ever and the biggest corn crop since record production in 2016.
After two record-setting years in a row, U.S. net farm income will decline sharply in the near term, pulled down by lower crop and livestock prices, though it will remain well above its 10-year average, said FAPRI on Wednesday. The University of Missouri think tank said food inflation would drop to 4.4 percent this year — less than half of last year’s rate — and run at 2 percent in following years.
High commodity prices supported "profit opportunities for many producers across the farm sector" ahead of the spring planting season, although there were concerns about operating expenses, higher interest rates and drought, said the Kansas City Federal Reserve Bank.
Battered by drought and rising costs, U.S. cotton growers will devote more of their land to corn, wheat and soybeans — crops that promise higher revenue this year — while sharply reducing their cotton plantings, said a survey released on Sunday. The National Cotton Council said its survey of growers indicated 11.4 million acres will be planted to cotton this spring, 17 percent less than last year.
With U.S. wheat selling for a record-high average of $9.10 a bushel, growers say they will sow the largest amount of land to wheat in seven years, enough to bump up production by 17 percent.
Economic growth and inflation will slow in the coming months, but commodity prices are likely to be volatile as the world’s farmers try to catch up with the global appetite for food, said two leading agricultural economists on Wednesday. “I think that 2023 still looks pretty strong” for U.S. farm income, said Nathan Kaufman, the Kansas City Federal Reserve Bank’s principal expert on agriculture economics.
The Russian invasion of Ukraine drove food prices to record levels during 2022 and the Food Price Index remains elevated after a nine-month decline, said the UN Food and Agriculture Organization.
High commodity prices will combine with strong demand to hold farmland values at near-record levels in 2023, said Farmers National Co., a farm real estate and management company, on Wednesday.
Strong commodity prices are creating opportunities for U.S. farmers to profit despite the risks posed by drought and higher production costs, said the Ag Finance Update by the Kansas City Federal Reserve Bank. Farmland prices surged an average of 20 percent in the Farm Belt during the summer as buyers shrugged off sharply higher interest rates.
Farmers in the Midwest and the mid-South are paying the price for low water on the Mississippi River in the form of lower cash bids for their corn and soybeans — as much as $2 a bushel lower for soybeans, said USDA economists on Wednesday. At the same time, the cost of transporting fertilizer upriver has increased, and neither situation is likely to change before late winter.
After reaching a record high in 2022, U.S. farm exports will plateau amid a world of uncertainties, said the USDA chief economist on Tuesday. The strong dollar and slower economic growth worldwide will be a drag on exports, now forecast by USDA at $193.5 billion this fiscal year, down slightly from the estimated record of $196 billion in the fiscal year that ended on Sept. 30.
Headwinds are intensifying for the farm sector, although high commodity prices support a positive outlook for farm finances through the end of this year, said a survey of ag bankers on Thursday. Alongside increased loan volume during the summer, “interest rates rose sharply and pushed financing expenses to the highest level since 2019.”
U.S. growers reaped their second-smallest wheat crop in 20 years due to drought in the Plains, said the Agriculture Department. The smaller-than-expected harvest would delay any American role in restoring grain flows disrupted by the Russian invasion of Ukraine.
With the fall harvest getting under way, traders expect the USDA to trim its estimate of the U.S. corn crop by more than a quarter-billion bushels on Monday but to stick to its forecast of the largest soybean crop ever, at roughly 4.5 billion bushels. Dry weather in the western Corn Belt, including powerhouses Iowa and Nebraska, will lower corn production to just below 14.1 billion bushels, or 1 billion bushels less than last year, according to the average estimate from traders surveyed by wire services.