Purdue agricultural expert optimistic about yields, general economy

“It’s a lot like predicting the weather,” Hurt said Wednesday during the 11th annual Farmer’s Breakfast at Pewter Hall in Brownstown.

“I can tell you corn prices are going to go down and keep going down until they go up,” Hurt said with a laugh.

He said weather forecasters do the same because it’s much easier to say it’s going to be hot and dry when it’s hot and dry.

Hurt, a regular fixture at the breakfast sponsored by the Community Foundation of Jackson County, said last year’s drought left many in agriculture with a sense of loss.

“We have a big obligation to mankind,” said Hurt, who is editor of Purdue Agricultural Economic Report.

“Food is not something we can just go acquire anywhere. It has to be produced. It’s vitally important that we have this opportunity every year.”

Hurt said he is predicting normal yields with good returns this year for farmers in the Eastern Corn Belt, which includes Indiana, Ohio and Illinois. The drought continues to linger in the Western Corn Belt, although it appears to be abating some, he said.

Hurt said he also is optimistic about the general economy because the stock market continues to be up and there have been improvements in the housing and labor markets.

“And the Fed says interest rates are going to remain low for now,” he added.

Corn prices should remain in the $5 range this year and through 2016, he said. At that price and lower, animal production will return to profitability, he said.

Last year’s drought meant rising costs for feed, forcing some farmers to thin their herds. The decrease in inventory led to higher prices in the store.

“We have the lowest number of cattle in the U.S. since 1952,” Hurt said. He said Americans also have cut their consumption of beef about 10 pounds per person to 55 pounds a year since 2007.

“2005 was the last year of $2 corn,” he said. “That was an era of tight money.”

Since that time, the agricultural industry has had strong growth, which might be coming to an end because ethanol production has leveled off with government regulation and there is less demand from China and competition from other countries, Hurt said.

“Three things can happen,” Hurt said. “Everything can continue to go up. It could level out, or everything could go down.”

Hurt said he believes crop prices, along with the costs, will moderate over the coming years.

“I see a soft landing overall for the ag economy,” he said. “There’s a possibility some costs might come down.”

He added he also sees the return on an acre of farmland declining from a high of $331 in 2011 to about $221 an acre in 2016. That’s still double what used to be the normal $100 an acre, he said.

Maria and Jacob Grove attended the breakfast for the first time Wednesday. The young couple raise cattle and grow corn and soybeans on a farm northwest of Medora.

“We kind of wanted to come out and see what he had to say about the outlook,” Maria Grove said.

Jacob Grove said Hurt likely had a good handle on the agricultural outlook for the coming years.

“But then again, like he says, there’s always the weather,” Grove said.