Multiyear run of low corn and soybean prices looms

Corn and soybean farmers should plan for much lower market prices for their crops in the near term, given trends in the futures markets, said six analysts writing at the farmdoc daily blog. “We may be again entering a period of lower prices, like that from 2014 through 2019,” they said.

Lower commodity prices and higher production costs would squeeze farm finances. The analysts said that operators with highly productive farmland in the Midwest could lose money on this year’s corn and soybean crops when land costs are considered. In constructing sample crop budgets, they used season-average prices of $4 a bushel for corn and $10.50 a bushel for soybeans, well below the USDA estimates for 2023 crops of $4.65 a bushel for corn and $12.50 a bushel for soybeans.

Trading on futures markets suggests $4 for corn and $10.50 for soybeans are appropriate estimates of the average price for this year’s crops, said the analysts, who are from the University of Illinois, Ohio State University, and the Illinois FBFM Association. A price of $4 a bushel for corn would be the lowest season-average price since 2019. The futures markets indicate that slightly higher prices are likely for 2025 crops — about $4.30 a bushel for corn at harvest time and $10.80 a bushel for soybeans.

“Using these prices will result in negative returns for most cash-rented farms. Depending on a farm’s debt position, owned farmland could still provide positive cash flow,” said the analysts. Farmers typically resort to belt-tightening when returns fall. “The price and return outlook suggests downward adjustments in cash rental rates,” they said.