Sharply lower prices for palm, sunflower and soybean oils helped pull down the Food Price Index marginally from its record high that followed Russia's invasion of Ukraine, said the UN Food and Agriculture Organization. Grain prices also fell during April while meat, dairy and sugar prices rose.
The typical Midwestern grain farm could generate more than twice as much income this year as in 2019, thanks to higher market prices and large federal payments, said two University of Illinois analysts. The outlook for the new year is much more dour, especially without new stopgap payments.
The largest U.S. grain processor, ADM, is pursuing a takeover of Bunge, another of the giants of the grain trade that collectively are known as ABCD — ADM, Bunge, Cargill, and Louis Dreyfus, an unnamed source told Reuters. Due to low prices engendered by a string of bumper crops worldwide, margins are tight in the grain trade.
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.
Some 5 million hectares of polluted or degraded farmland in China will be retired from production, with a resulting 2.5-percent drop in grain production by 2020, a state planning official told reporters in Beijing. Reuters reported that the official, Wu Xiao, said food security would not be affected by the downturn in production.
A monthly Purdue survey says farmers plan to store more of their crop than normal during the fall harvest, likely because of sharp declines in commodity prices since spring. More than 40 percent of respondents told the Ag Economy Barometer that they have priced a smaller portion of their crops than they would in a typical year.
The global grain glut and weaker demand from China will keep grain prices low into next year, according to analysts at Olam International, one of the world's largest commodities traders, reports Bloomberg.