A quarterly report to the Farm Credit Administration last week suggests commodity prices will mostly remain low next year. The report cites large global supplies of crops in storage, saying that will limit attractive price opportunities for U.S. farmers.
For the next three years, soybean prices are projected at roughly $8.50 a bushel, with corn at $3.70 a bushel. The report says livestock and dairy returns are likely to be positive in early 2020, but trade risks remain elevated. Meanwhile, the report says that while it’s been a difficult year in 2019 for farmers and ranchers, facing trade disruptions, weather extremes and low prices.
Crop insurance indemnities, farm programs, and Market Facilitation Program payments continue to provide financial support to the farm economy. The report says farm financial conditions may become more challenging next year without stronger markets, or more aid payments.
Further, the Farm Credit System remains financially sound, according to FCA, and lenders continue to have the risk-bearing capacity to respond to the credit needs of agriculture.