Market News

FAPRI outlook points to lower farm income

Farmers should expect volatility in corn and soybean markets for the next few years. That’s according to Pat Westhoff, director of the University of Missouri Food and Agricultural Policy Research Institute. Over the next five years, corn will average $4 a bushel and soybeans $10 a bushel, said Westhoff, citing FAPRI’s recent baseline outlook. Global competition and unrest will contribute to market direction, Westhoff added.

“Just where prices will go in any given year can be very dependent on weather, and as we’ve seen, very dependent on political developments as well,” said Westhoff, during an interview with Brownfield Ag News. “With lots of additional supplies in the world and with reduced overall growth in the demand side than what we’ve been used to for the last few years, prices are likely to average a lower level than we’ve had in recent years.”

Westhoff calls FAPRI’s grain price projections more pessimistic than a year ago, but more optimistic than USDA’s.

On the other hand, the reduced fortunes for crop growers will result in better days for livestock producers.

“Throw in the fact that we have very good prices for cattle right now and not too bad prices for some other livestock species as well, we should have pretty good returns for most livestock producers in 2014,” said Westhoff.

As a result of the falling markets for corn, soybeans and other grains, FAPRI is estimating that net farm income will drop 24 percent in the next year.

AUDIO: Pat Westhoff (9 min. MP3)