Increased global grain production and lower domestic demand for corn for ethanol means crop producers should prepare now for lower grain prices in 2014, says Matt Roberts, an expert from

Increased global grain production and lower domestic demand for corn for ethanol means crop producers should prepare now for lower grain prices in 2014, says Matt Roberts, an expert from Ohio State University's College of Food, Agricultural, and Environmental Sciences.

"Prices reflect that we have moved from an era of scarcity to one of adequate inventories and prices have responded by moving lower," says Roberts, an Ohio State University Extension economist. "We are already seeing lower prices come into the market, and unless U.S. or South American acreage declines, those prices are likely to continue to move lower. The prices we had earlier in the year aren't guaranteed to return."

Markets are moving back toward matching supply and demand because of several factors, including no growth in ethanol demand and expanded global crop acreage.

 

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Add another year of corn yields higher than 160 bushels per acre and soybean yields of 42 bushels per acre, and Roberts says growers can expect to see even lower prices – prices that are well below the cost of production on land that has been purchased or cash-rented in the past three to four years.

"Prices will only return to profitable levels if supply declines due to acreage leaving primary row crops or demand returns," he says. "This will likely create a significant financial strain in crop-growing areas."

Read more about Roberts’ thoughts on future grain prices at Ag Answers.

 

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"Prices reflect that we have moved from an era of scarcity to one of adequate inventories and prices have responded by moving lower," says Roberts, an Ohio State University Extension economist. "We are already seeing lower prices come into the market, and unless U.S. or South American acreage declines, those prices are likely to continue to move lower. The prices we had earlier in the year aren't guaranteed to return."

Markets are moving back toward matching supply and demand because of several factors, including no growth in ethanol demand and expanded global crop acreage.

 

Like what you're reading? Subscribe to CSD Extra and get the latest news right to your inbox!

 

Add another year of corn yields higher than 160 bushels per acre and soybean yields of 42 bushels per acre, and Roberts says growers can expect to see even lower prices – prices that are well below the cost of production on land that has been purchased or cash-rented in the past three to four years.

"Prices will only return to profitable levels if supply declines due to acreage leaving primary row crops or demand returns," he says. "This will likely create a significant financial strain in crop-growing areas."

Read more about Roberts’ thoughts on future grain prices at Ag Answers.

 

You might also like:

World Soil Day soil health stories

Think Different: Best of 2013, Part 1

Cash rent impact on farmer returns