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FAPRI projects price weakness for 2015

The Food and Agricultural Policy Research Institute projects that 2015 will see some moderation in livestock prices and continued low crop prices.

The institute’s director, Pat Westhoff, tells Brownfield Ag News that corn prices could hover near $4 a bushel through 2020, after dropping down to $3.89 in the coming year.

“It’s certainly in line with where markets appear to be now,” said Westhoff, from his office at the University of Missouri.  “Futures are actually a trifle lower than that right now for the 2014 crop; the market probably anticipates an even bigger crop than was projected by USDA this past month.”

During that same five years, soybean prices are projected to range from $10.30 to $10.69 a bushel.  Wheat prices are projected to drop to $5.97 a bushel by 2020.

Westhoff says the FAPRI projection will help farmers decide whether to take part in the government’s Price Loss Coverage program or the new Agricultural Risk Coverage program.

“If we’re talking about corn and soybean producers, it leaves some possibility that quite a few producers might be able to get significant payments for the 2014 crop; payments they would not receive until next fall,” said Westhoff.  “But those expected payments are very much contingent on where prices turn out to be.”

On the flip side, livestock producers are seeing higher prices resulting from strong demand and limited supplies. With lower feed costs, Westhoff expects producers to expand production, which will eventually lower prices.

If livestock prices moderate, Westhoff says it’s possible food price inflation could drop to less than 2 percent in 2015.

AUDIO: Pat Westhoff (8 min. MP3)

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