Outlook: Downward pressure could continue throughout 2024

Each year, the Food and Agricultural Policy Research Institute at the University of Missouri and its collaborators put together a baseline projection for the U.S. and world ag sectors for the major grains, oilseeds, biofuels, livestock and dairy commodities.

FAPRI-MU often analyzes policy issues for the U.S. Congress and various federal agencies and state government officials.

I attended and moderated a panel during FAPRI’s recent annual conference. Panel discussions featuring both domestic and international policy experts and economists specializing in every commodity filled the day.

I often advise people that if they are the smartest one in the room, they are in the wrong room. I was not in the wrong room.

The day began with FAPRI Director Pat Westhoff reviewing some of the key results from the March 2024 report. A few of the highlighted baseline projections are:

• Grain and oilseed prices have declined in the 2023-2024 marketing year from the record levels of the previous year. Prices could decline again in 2024-2025 if growing conditions result in trend-line yields.

• U.S. corn production hit a record high in 2023. Corn prices that averaged $6.54 per bushel in 2022-2023 fall to a projected $4.39 per bushel in 2024-2025 and even lower in later years.

• U.S. soybean prices fall from $14.20 per bushel in 2022-2023 to a projected $10.73 per bushel in 2024-2025.

• After averaging a record $8.83 per bushel in 2022-2023, projected wheat prices fall to $6.13 per bushel in 2024-2025.

• Changes in relative prices cause an acreage shift from corn to soybeans in 2024, resulting in record U.S. soybean production.

It is important to note that the baseline reflects current policy, programs enacted prior to January 2024.

The baseline serves as a reasonable point of reference for evaluating alternative scenarios. It is not a prediction of future market conditions or policy choices.

As I listened to those very smart people in the room discuss policy and commodities throughout the day, I took note of the words, topics and phrases that came up during every conversation: regulations, infrastructure, technology and data, water, trade, and farm bill.

As an agriculture journalist and communicator and as someone with “skin in the game” in production agriculture, I believe it will serve me well to keep those topics in a clear line of sight in coming weeks and months.

There is much to consider as we get the 2024 crop in the ground. We are knee-deep — some might say neck-deep — in uncertainties.

Will Mother Nature play nice in 2024? Will drought continue in those areas that were impacted last year, the year before and the year before that?

We do not yet have a farm bill and if the smart people I heard talk about it during the FAPRI conference are right, those who lean far to the left or far to the right probably aren’t going to get what they want in the legislation.

We are coming off unprecedented financial assistance for agriculture. What is the appetite to invest in those programs and to what level should agriculture face greater challenges in coming years?

Stay tuned.