The Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri updated its baseline projections (link) based on information as of mid-August and current government policies. FAPRI said, “In the absence of new shocks to the weather, the macroeconomy or policy, projected prices generally remain near current levels over the next five years.” Key results:
- Increased acreage and record yields result in a record 2024 U.S. soybean crop. Even with a significant increase in crush and a rebound in exports, projected year‐end stocks of soybeans increase sharply, pushing projected 2024-25 soybean farm prices down to $9.99 per bushel, below the levels USDA reported in its August World Agricultural Supply and Demand Estimates (WASDE).
- Record yields result in the second consecutive 15-billion-bushel U.S. corn crop in 2024, despite a 4 million acre decline in planted area. The projected $4.10 per bushel 2024/25 farm price of corn is 37% below the price just two years ago.
- Projected prices for wheat, cotton, rice, sorghum and many other crops decline in 2024-25 in the face of large global crop supplies. The value of crop sales declines in 2024, as the effect of lower prices outweighs the effect of increased production for multiple crops.
- Given the projected reduction in prices for a broad range of crops and moderating production costs, there is currently little incentive to sharply change the allocation of crop acreage in 2025.
- Assuming average growing conditions in future years, projected prices remain near 2024-25 levels for many crops. Between 2025-26 and 2029-30, corn prices average $4.12 per bushel, soybeans average $9.98 per bushel and wheat prices average $5.70 per bushel.
- Under the assumed extension of 2018 farm bill provisions, effective reference prices for several crops increase for several years but then decline again, based on statutory formulas tied to moving averages of past market prices. However, a new farm bill could change reference prices and other farm program provisions.
- Projected biomass‐based diesel production increases, as more renewable diesel plants come online. Used cooking oil, much of it imported, accounts for a large share of the growth in feedstock supplies, limiting the growth in demand for soybean oil and other fats and oils.
- Ethanol production is projected to remain relatively stable. More efficient gasoline‐powered cars and more electric vehicles reduce gasoline use, but there is a modest uptick in projected use of E‐15 and higher‐level ethanol blends; ethanol exports also increase.
- The outlook assumes a continuation of current policies, but changes in the implementation of the federal renewable fuel standard, California’s low‐carbon fuel standard or tax policies could result in very different levels of biofuel production, even without changes in laws. Sustainable aviation fuel use is assumed to grow slowly.
- The cattle sector is the most important exception to the pattern of declining commodity prices. Past years of drought and low returns have resulted in a smaller U.S. beef cow herd, reducing beef production and pushing up prices for feeder and slaughter animals.
- Beef production declines again in 2025, although not as much as projected by USDA in its August WASDE report.
- The cow herd begins to expand in 2026, resulting in more production and lower prices.
- Hog prices fell in 2023, reducing net returns in 2023 and 2024, despite some moderation in feed costs. By 2026, the result is a reduction in production, causing an increase in hog prices and net returns. After dipping in 2022 from reduced demand from China, pork exports increase with global economic growth and a projected weakening of the dollar against many other currencies after 2024.
- Wholesale chicken prices also fell in 2023 but remain above pre‐2022 levels. Projected broiler production increases at a modest pace, with both exports and domestic use increasing over time.
- Per‐capita domestic disappearance of meat (beef, pork, chicken and turkey) is projected to decline slightly in 2025 because of reduced beef supplies and higher beef prices, but then increase in later years, reaching a record 227 pounds by 2027.
- Like many other commodities, milk prices fell sharply in 2023 from the record levels of 2022. In 2024, annual production is steady, resulting in slightly higher prices given demand growth, despite challenges in the nonfat dry market.
- Projected milk prices remain slightly under $21 per hundredweight from 2025 to 2029, as growth in milk production is matched by increases in dairy exports and in domestic cheese demand.
Comments: Market and some policy makers are paying attention to this due to the foreshadowing of what’s ahead from USDA. This will be the most current until USDA releases their baseline after the October WASDE.
Of note is FAPRI’s biofuel demand as noted below:
Also of note: Soybean prices with a “$9.”