Low prices have been a theme this year, and economists say it is going to take a big push to get out of this slump.
“Maybe not news, but it’s a fact that we are in a period of long-run lower prices where we’ve settled in a corn price around $4 and a soybean price around $10, a little bit below that on beans, a little bit above that, maybe on corn right at this minute. But we’re in a longer run, a period of low prices. It’s going to take something significant to move us out of this state. Now, there’s a lot of uncertainty about what supply and demand for corn and beans looks like, especially as we transition to a new administration in Washington. But that’s the story that we have as of right now,” said Joe Janzen, an agricultural economist at the University of Illinois.
USDA has been watching this situation for some time now. Economists there say periods like we are currently in are more common than you would think.
“What happens is you get this confluence of forces, which add a shock and give you a short price run until the market resolves itself, right? Whether that’s a series of combined supply shocks from the weather around the world, or whether it’s a war, or whether it’s some other event that comes along and knocks us off this path of narrow margins. So I don’t know how long it’s going to last, but if you look back in time, these narrow margin periods are more common than the 2022 type years by far,” said Seth Meyer.
Meyer says that is why it is important to set aside more money during periods of good income.
