August 22, 2019

Ag Economy; Regulations; Farm Bill; Climate; CFTC; and, Political Notes

Agricultural Economy

University of Illinois agricultural economist Gary Schnitkey indicated yesterday at the farmdoc daily blog (“Prospects for Grain Farm Incomes in 2014”) that, “Average grain farm incomes in 2014 likely will be much lower than 2013 incomes. Corn prices near $4.20 per bushel combined with above average yields could result in average incomes on grain farms in Illinois around $45,000 per farm, slightly below the average for the years from 1996 through 2005. A scenario that would result in average incomes near $134,000 per farm, the 2013 level of average income, would be above average yields combined with corn prices near $4.80 per bushel. This is a large range ($45,000 to $134,000), and it represents the likely range of average grain farm incomes over the next several years, with lower incomes possible if low commodity prices occur [related graph].”

Yesterday’s update noted that, “While grain prices and yields are far from certain, most current projections of prices and yields result in much lower incomes for 2014.”

In conclusion, yesterday’s farmdoc update indicated that, “Corn prices in the low $4.00 range likely will result in incomes below $50,000. Corn prices in the high $4.00 range will result in average incomes above $100,000. If corn prices average around $4.50 over the next several years, average incomes likely will be in the above range for the next several years. Lower incomes are possible with corn prices below $4.00 per bushel.”