University of Kentucky Extension economist and grain specialist Grant Gardner says 2024 may be one of the toughest years for grain producers in the past decade, given the absence of a major event that could drive substantial price increases. This was from his article, “Minimal Price Gains Amid Record Yields: A Tough Outlook for Grain Producers in 2024,” posted on Southern Ag Today in mid-September.
Gardner says, “The September World Agricultural Supply and Demand Estimates (WASDE) report indicates modest changes in supply and demand for corn and soybeans. The World Agricultural Outlook Board increased their estimated corn yield by 0.5 bushels per acre, offset by a decrease in carryover from the 2023 marketing year.”
In other crops, he says soybean demand also saw a slight increase of 2 million bushels. Both cotton and rice yields were cut; however, the reduced yield expectations were offset by lower demand, resulting in no change to the projected season-average price. Corn and soybeans exceed trend yields by 2.6 and 1.2 bushels, respectively, and represent a national high, he says.
“Record yield expectations are driving stocks-to-use ratios, a key indicator of surplus, to levels much higher than in recent years. Consequently, the U.S. Department of Agriculture has projected the marketing year average price for corn to be around $4.10 per bushel, while soybeans are expected to average $10.80 per bushel.
“Currently, domestic consumption and exports of corn and soybeans appear to be stable. Crush (processing) and ethanol production are at or near record highs, while export demand is lower, but somewhat steady.”
Gardner says consumer price index-adjusted corn prices are the lowest since 2011 and soybeans are nearing 2019 lows. “Without a significant change in the yield estimate due to drought or overestimation, it is hard to envision a sharp price rise for the 2024/25 marketing year.” CS