United States Department of Agriculture (USDA) officials painted a grim picture of farm country at its annual Agricultural Outlook Forum. A USDA official shares why commodity prices remain low and why little relief is in sight.
USDA Chief Economist Rob Johansson says he expects net farm income to fall or remain flat on a long-term basis. Johansson backs up his hypothesis with one specific set of numbers.
“Since 1960, soybean has increased more than 1000% while soybean prices have fallen by 47%,” Johansson said. “Just amazing.”
Johansson adds increased United States corn production has also negatively impact prices.
“Corn production has grown by more than 400% and prices have fallen by more than 60%. We show real net farm income falling in real terms. It’s likely to remain 50% below its 2013 peak for a third year in a row,” Johansson said.
USDA predicts net farm income this year will come in at $59.5 billion. Johansson believes new market opportunities could help raise USDA’s projected net farm income. He adds demand increases as the middle-class, worldwide, continues to grow. Johansson also think weather, trade deals, as well as other factors could influence net farm income.