Grain Farm Incomes Expected to Plummet This Year

The latest Agricultural Price Report issued last week by the U.S. Department of Agriculture’s (USDA) National Agricultural Statistics Service (NASS) reported that the index of prices received for crop production was down by 11% from the same time period last year, while the price-paid index was unchanged; included in the report was the fact that corn prices had fallen by more than 20% and soybean prices by almost 33%.

Facts such as these mean that there is little wiggle room for farmers, and a report issued earlier this month by Dr. Gary Schnitkey of the University of Illinois, suggests that farmers should focus on four specific areas in which to cut costs in the coming years – machinery purchases, managing seed, fertilizer and chemical costs, through negotiating lower rents, and the reduction of family living withdrawals.

“With domestic demand growth relatively flat and a strong dollar giving us a challenge in export markets, we can expect prices to have a hard time moving above this level for the next couple years at least,” said Bob Young, chief economist at AFBF.

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