With record high prices, corn farmers across the Midwest have generally done well in recent years, but some fear that’s about to change. Corn prices dropped more than a dollar over the winter from a harvest price of $5.40 per bushel.
Even if they creep up, ag management analyst Gary Schnitkey says farmers can expect much lower incomes from grain this year and that means less money to spend.
Schnitkey says, “I would just, in general, see lower purchases of agricultural inputs because of lower prices and just less disposable income.”
A bumper crop last year and proposed cuts to ethanol production are contributing to the lower price forecast, but he says good weather or increased export demand could shift things in farmers’ favor.
Schnitkey says there is a silver lining in the projection of lower prices as savvy renters may get better deals for next year.
“Cash rents coming down,” he says. “We haven’t seen that in a long, long time so it could present opportunities for some people. Getting those cash rents to come down is always a tricky thing. It’s a hard conversation for farmers to have with landowners.”
Many farmland owners depend on income from rent, which they won’t want to lose, but younger farmers may finally see a break in the sky-high land values that have made it difficult to get in to the farming business.