Commodity prices will fall "significantly" in 2013 due to strong corn and soybean production in 2013, USDA’s chief economist predicted today at the agency’s annual Agricultural Outlook Conference in Arlington, Va.With those prices, I wonder if income will be enough to sustain $400 an acre cash rent. I would think that would bite into your bottom line, but luckily, I don't have to worry about it.
Joe Glauber predicted that corn prices will average $4.80 a bushel in 2013/14, down 33% from the marketing year before. Soybean prices, he estimated, would fall 27% to $10.50 per bushel. A return to normal weather conditions, he predicted, will result in higher production that will depress prices.
"There’s no reason to believe that we won’t be looking at normal yields this year," said Glauber, noting recent improvement in drought conditions, particularly in the eastern Corn Belt. "Historically, there’s little correlation between rainfall one year and the next."
Better weather, combined with more planted acres, should result in strong farm incomes in 2013, he said. Net farm income, according to ERS data released earlier this year, will equal $128 billion, the highest level in real terms since 1973.
Livestock producers, on the other hand, won’t feel the beneficial impact of lower feed prices until later in the year. Net cash income for the livestock industry, according to ERS’s forecast, will fall in 2013 due to a 6% increase in feedstock prices.
Friday, February 22, 2013
A Grim Forecast
From Agweb, via nc links: