WEST LAFAYETTE — Local farmers are crossing their fingers for a surge in crop prices to kick off the planting season with experts predicting another gloomy year for the bottom line.
Current projections for corn and soybean returns appear weak, according to the Center for Commercial Agriculture at Purdue University’s latest price outlook released Monday. Driving the forecast is a return to normal yields and an increase in fertilizer costs, as farmers carry over more of last year’s crops.
“If you have some old crop inventories remaining that you’re thinking about pricing or wondering about pricing, our advice would be in the short run: hold off a bit and see what happens,” director Jim Mintert said during a webinar analyzing the forecast.
Prices for corn range from $3.35 to $3.75 per bushel and $8.10-$9.10 per bushel for soybeans, according to the U.S. Department of Agriculture. Corn prices have a “relatively small chance” of breaking above the $4 mark this fall, associate director Dr. Michael Langemeier said.
Historically, prices tend to rally around planting time with good weather. While Mintert said that could “easily be the case this year,” he cautioned against waiting past early June to sell old inventory to take advantage of the best prices.
Farmers are still reeling from the one-two punch of years of low crop prices combined with the ongoing trade dispute with China. Last season, the government sent out payments to help offset the impact of retaliatory tariffs, but another round of bailouts isn’t expected this year. Payments allotted by the 2018 Farm Bill also won’t do much to help profits, economists said.
Concerns about commodity prices helped lower ag producer sentiment in February, according to Purdue’s Ag Economy Barometer. March’s report is due today as farmers digest the government’s latest planting and grain inventory forecasts.
The amount of corn in storage was larger than predicted, up 270 million bushels to 8.605 million bushels, the report said. Farmers expect to put 92.792 million acres of corn in the ground this year, an increase of 1.46 million from previous estimates.
The outlook isn’t as strong for soybeans, where economists say the trade dispute remains a wildcard for results. Producers said they plan to lay 84.617 million bushels this year, down 1.55 million from the USDA’s original forecast.
Corn acreage was up 3 percent in Indiana compared to last year, according to the USDA, while soybean acreage declined 4 percent.
Trade returns to the spotlight this week as another round of negotiations with China begins.
“We’re cautiously optimistic that something would be resolved that would be favorable to U.S. agriculture, but we don’t know,” Mintert said.