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Commodity prices put pressure on farm incomes

After multiple years of record farm incomes, an ag economist says farmers are heading into 2015 with commodity prices that don’t support the total cost of production.

Purdue’s Chris Hurt tells Brownfield returns look pretty bleak at this point.  “These returns look like they would be able to cover their input costs and maybe come close to paying their cash rent if they have cash rent,” he says.  “What that leaves uncompensated then is any machinery depreciation or recovery to replace machinery and any family living expense.”

Hurt says the latest USDA report suggests average marketing year price for corn will be around $4 and close to $9.50 for soybeans.  “This will be a very tight margin year,” he says.  “It really implies some different strategies than what we’ve seen in the last 5 to 7 years of much more robust, healthy, and enjoyable margins.”

He says USDA’s prospective plantings report indicates the number of soybean acres could reach an all-time high in 2015 and that also contributes to the lower price projection for soybeans.