It’s hard to think about what next year could bring while combines are rolling, but it will be here sooner than you realize. With so many unknowns in weather and trade, focus on what you know and keep an eye on futures.
“In 2020 we expect, if weather conditions are ‘normal,’ people to plant corn and soybeans in line with 2019 intentions,” says Pat Westhoff, director of the University of Missouri Food and Agricultural Policy Research Institute (FAPRI). “That’s 92 to 93 million corn acres and 84 to 85 million soybean acres.”
He doesn’t expect to see much positive, or overly negative, movement in corn and soybean prices—it’ll be a lot more of the same. However, if normal weather occurs farmers can expect higher yields and higher stocks in 2020 when compared to 2019.
“We expect a production increase by one billion bu. in corn and 1/2 billion bu. in soybeans in 2020, when compared to 2019,” Westhoff says. “It could be another tough year for a lot of people. We expect to see more people getting behind on loan payments.”
While times are tough, and have been for several years, the outlook is still better than that of the 1980s.
“Interest rates were in the double digits and bankruptcy rates were higher,” Westhoff says.
Income forecasts 2019 and beyond
In its latest Baseline report, FAPRI researchers include Market Facilitation Program (MPF) payments for 2019 and assumes some of the 2019 MFP payments will be distributed in 2020. The estimates could change for other unknown variables.
See the full report here. A couple notable highlights from the report include:
- Net farm income and cash income increase slightly in 2019 as government payments and crop insurance indemnities offset reductions in cash receipts.
- In 2020, net farm income increases but cash income decreases. This is because potential grain in bins counts toward net farm income, but not cash.