Crop price projections increasingly pessimistic

Farmers should brace for even tighter margins and implement applicable risk management practices based on the latest crop price estimates from the University of Illinois farmdoc team.

Current levels of futures contracts suggest appropriate budgeting for 2024 crop production is down to $4 per bushel for corn and $10.50 for soybeans.

Those prices would result in low returns for 2024, much lower than the most recent low-price period from 2014 to 2019, according to ag economists on the U of I farmdoc team.

“I think we’ve now entered a period of lower returns to farming just like we did in 2013 and 2014,” Gary Schnitkey, U of I soybean industry chair in ag strategy, previously told FarmWeek. “The big thing that we see right now is that just like in 2013 and 2014, cash rents are high relative to the return potential for farmland.”

The national marketing year price for corn is currently forecast at $4.65 per bushel (the 2023 marketing year ends in August) compared to $6.54 in 2022. If it drops to $4 for 2024, it would be the lowest since 2019 ($3.56).

It’s a similar story for soybeans with a current projected price of $11.55 per bushel for 2024 compared to $13.76 in 2023.

“I think we’ve now entered a period of lower returns to farming just like we did in 2013 and 2014. The big thing that we see right now is that just like in 2013 and 2014, cash rents are high relative to the return potential for farmland.”

—  Gary Schnitkey, University of Illinois soybean industry chair in ag strategy

Meanwhile, cash rents increased from an average of $277 per acre statewide from 2014 to 2019 to a projected $359 per acre in 2024, an increase of $82. Non-land costs during the same time increased by $185 per acre for corn and $149 for soybeans, according to Illinois Farm Business Farm Management data.

“Current market price indicators of $4 per bushel for corn and $10.50 for soybeans are above the 2014 to 2019 averages,” the U of I economists noted. “Still, return levels likely will be much lower than from 2014 to 2019 because of higher costs.”

And don’t look now, but current futures prices suggest cash prices at harvest could dip to around $3.80 for corn and below $10 for soybeans.

Beyond that, futures prices suggest market year average prices for 2025 of around $10.80 per bushel for beans while cash corn prices at harvest in 2025 could be in the low-$4.30-range.

Visit the website, farmdocdaily.illinois.edu, to read the U of I’s latest report and crop budget projections.

This story was distributed through a cooperative project between Illinois Farm Bureau and the Illinois Press Association. For more food and farming news, visit FarmWeekNow.com.