Global prices for cereal grains, dairy products and vegetable oils fell during September, pulling the Food Price Index to its lowest reading in at least a year, said the UN Food and Agriculture Organization. Corn prices dropped by more than 4 percent, "mostly on expectations of a very large crop in the United States and ample supply prospects globally," said the FAO.
Corn may be more profitable than soybeans in 2019, but that isn’t saying much about the outlook for midwestern farmers, say a pair of agricultural economists from the University of Illinois.
The mammoth corn and soybean crops awaiting harvest across America are larger than expected, the USDA said on Wednesday in its monthly Crop Production report.
A year after making soybeans the most widely grown crop in the country, U.S. farmers will make corn king again, driven by trade war with China and a burdensome soy stockpile, said the FAPRI think tank at the University of Missouri. "China's tariffs will reduce U.S. soybean exports," said FAPRI. The research group expects farmers will slash soybean plantings by 5.5 percent in 2019 in the face of the lowest market price in 12 years.
Soybeans are the largest U.S. farm export to China, and growers of the oilseed may be in line for huge federal payments, worth an average of $85 an acre, to offset the impact of retaliatory Chinese tariffs. Corn growers, meanwhile, might not get enough per acre to buy a cup of coffee at many restaurants.
Midwestern farmers will likely need large reductions in rental rates on cropland in 2019 to have a chance of making money on corn or soybeans, said economist Gary Schnitkey of the University of Illinois.
In its monthly Drought Outlook, the National Weather Service says drought will persist in northern Missouri and southeastern Iowa through August, a key month for crop development. Nationwide, about 15 percent of soybean land and 11 percent of corn land is in drought.
Thanks to continued strong demand from overseas buyers, U.S. corn exports this trade year could be the second highest ever, the Foreign Agricultural Service said on Thursday.
The typical midwestern corn and soybean grower lost tens of thousands of dollars in potential revenue due to steep declines in commodity prices over the past four weeks, said Purdue economist Brent Gloy, listing global trade uncertainty as an obvious factor.