A late September, 200-mile drive through the sunny center of northern and central Illinois reveals blue sky, yellowing fields and not one roaring red, green or silver combine gathering in any of the anticipated abundant crops.
“We’re a solid 10 days from corn harvest,” a central Illinois farmer relates in conversation later that day. “Delayed planting and a wet May put everything back.” An early week moisture test on his corn showed “27, 28%, so we’ll wait…,” and for good reason.
With local cash corn prices hovering in the $3.80 per bushel area, few need a hefty grain drying bill to bite into already pinched profits. Thus, the standing corn sunny mile after sunny mile: it’s old-school drying in the field.
The U.S. Department of Agriculture agrees with the waiting farmers. Its September World Agricultural Supply and Demand estimates ratcheted the anticipated 2024/25 average corn price down a dime to $4.10 per bushel, or about 75 cents per bushel less than 2023’s season average.
For this year’s estimated 15.2 billion bushel crop, the forecasted year-to-year drop means 2024’s crop will generate an estimated $11.4 billion less in gross farm income. That’s a hard hit to the wallet.
The outlook is equally tough for Midwest farmers’ other top crop, soybeans. Central Illinois cash prices hover in the $10 per bushel range, a solid $2 under June prices just three hopeful months ago. That, too, will cut into 2024/25 gross income.
According to USDA’s September price forecast, farmers can anticipate an average price of $10.80 per bushel this coming year, or $1.70 per bushel less than the 2023/24 soybean crop. If that estimate holds — and nothing on the horizon suggests it won’t — collective gross receipts for American soybean growers will drop by $7.5 billion this year over last.
None of these headed-south prices, however, will bring lower food prices. In late August, USDA estimated “prices for all food are predicted to increase 2.3% in 2024 and 2% in 2025. The biggest increase will be in “food-away-from-home… predicted to increase 4.1%…”
The building gloom in today’s ag commodity markets — wheat, barley, oats and cotton farmers all face increased production and decreased prices — has caught the attention of a long-distracted Congress. Two Republican senators recently said they are interested in adding a request for some level of “ad-hoc relief” to must-pass legislation yet this fall.
In early September, USDA stoked the move by noting 2024 net income forecast will again drop, this time from $146.5 billion in 2023 to $140 billion this year.
That modest 4.4% drop, however, comes on the heels of 19.5% plunge in 2023.
Moreover, the University of Missouri’s Food and Agricultural Policy Research Institute predicts the now two-year tumble will carry into 2025 when, it noted in mid-September, net farm income will drop to $129 billion “before a modest recovery in 2026.”
Today’s falling grain prices, falling net farm income and falling farm spirit, however, have combined to reignite Congress’ waning interest in completing the long-delayed 2024/25 Farm Bill.
Although disagreements over proposed House cuts to food aid, USDA’s green energy programs and current conservation spending all remain unresolved, the current push centers on raising “reference prices,” the mechanism that triggers crop insurance subsidies — the Farm Bill’s main income support element.
Private reports suggest that Republicans hope to raise the reference prices “15%+ … while Stabenow,” the Democratic Senate Ag Committee boss, “suggests 5%.”
Which points to a likely split-the-difference, 10% deal, right?
Sure, but what’s likely in any harvest season is most unlikely in any election season.
