It appears that low grain prices are here to stay, and ag economists are forecasting some disappointing growing seasons, with ripple effects expected across the entire farm economy.
Researchers at the University of Illinois are looking at $4 corn this year, with soybeans landing around $10.50, and next year’s estimates are not much better. With these numbers, they warn returns could be negative for cash-rented farms. While a lot of farms have strong finances, low prices could chip away at the strength especially when it comes to working capital. They also say the current situation could move cash rents for certain pieces of land.
However, periods of low income are not anything new for U.S. farmers. The stretch between 2014 and 2019 was also difficult but was followed by a couple of years of record prices. Ag analysts are forecasting $4.30 for corn next year with soybeans at $10.80.
