LITTLE ROCK — Farmers looking ahead to the 2024 growing season are worried about being squeezed by sinking commodity prices, said Ryan Loy.
Loy, extension economist for the University of Arkansas System Division of Agriculture, spent the first two months of this year speaking to farmers at winter production meetings about revenues, profits, crop insurance and other fiscal topics. What he’s hearing back is anxiety.
Extension economist Ryan Loy talks about what's worrying farmers going in to th 2024 growing season. (U of A System Division of Agriculture photo by Mary Hightower)
“Commodity prices are falling. Production costs are declining,” Loy said. “The problem is that the two aren’t falling at the same rate and that lag may put the squeeze on farmers trying to make planting and purchasing decisions for the 2024 growing season.”
Soybean prices were relatively strong going into the new year as widespread drought took its toll on farming in the Midwest, leading to tighter stocks. Those higher prices may prompt farmers to plant more soybeans this year.
Brazil enjoyed a record soybean harvest in 2023 and exported more than 100 million metric tons. The outlook for 2024 is also bright, but the U.S. Department of Agriculture recently reduced its estimate of Brazil’s 2023-24 harvest to 156 million metric tons from 157 million metric tons, because of dry weather. China is a key buyer of Brazilian soybeans.
USDA is projecting Brazil’s corn output to be 124 million metric tons, which would make it the second highest on record.
“Brazil is on track for near-record production in both corn and soybeans,” Loy said. “From that perspective, we’re going to have an abundance of those commodities; and a high supply will turn into a lower global price.”
Russia is exerting additional downward pressure on corn and wheat.
“Russia is selling their corn and their wheat extremely cheap,” Loy said. “Russia doesn’t care what the price is. They’re saying, ‘we need to get some money for our grain to fund this war’.”