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FAPRI outlook shows downward shifts in farm income, commodity prices

Westoff

The Food and Agricultural Policy Research Institute at the University of Missouri celebrates its 40th year in 2024, but there wasn’t much celebratory news in FAPRI’s latest baseline projections. The report was released in March and summarized at the Abner Womack Missouri Agriculture Outlook Conference on April 3 in Columbia.
FAPRI’s report shows prices for many farm commodities have fallen sharply from 2022 peaks and will likely decline further for crops harvested in 2024 and beyond. As a result, net farm income is expected to hit the lowest level since 2020. 

“Despite a $30 billion drop in net farm income from 2022 to 2023 and another large projected decline in 2024, net farm income remains above annual levels from 2015 to 2020,” FAPRI Director Pat Westhoff said. “Still, there’s no question farm finances are much tighter than they were just two years ago.”

The report also noted that lower prices for farm inputs, such as fertilizer, partially offset the drop in commodity prices but not enough to avoid declines in farmers’ net returns. For livestock producers, lower prices for corn and soybeans reduce feed costs, offsetting price and demand challenges.

FAPRI’s annual outlook provides projections for agricultural and biofuel markets and serves as a point of reference for food and farm policy. The full report is available online at fapri.missouri.edu, but here are some key predictions:
 
• Corn prices that averaged $6.54 per bushel in 2022-23 fall to a projected $4.39 per bushel in 2024-25, soybeans fall from $14.20 per bushel to a projected $10.73 per bushel and, after averaging a record $8.83 per bushel in 2022-23, wheat prices are expected to fall to $6.13 per bushel.
• Rising production of renewable diesel increases demand for soybean oil plus other fats and oils, but the resulting increase in crush puts downward pressure on soybean meal prices. 
• Hog, poultry and milk prices all declined in 2023 as demand weakened. Projected hog prices are similar in 2024 as in 2023, while small declines are expected for poultry and milk prices.
• In contrast, cattle prices increased in 2023, and further increases are expected in 2024 and 2025. 
• For consumers, food price inflation slowed in 2023, and FAPRI’s report suggests that this trend could continue in 2024. The consumer price index for food is expected to rise 2.1% in 2024, with the food-away-from-home category accounting for most of the increase.

CLICK TO READ MORE FROM THE 2024 MAY ISSUE OF TODAY'S FARMER MAGAZINE.

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