BROWNSTOWN

The future of corn prices in Indiana and the rest of the Corn Belt look a lot better than the future of soybean prices.

A Purdue University ag economist delivered that message to farmers, agribusiness men and women and others during the 17th annual Community Foundation of Jackson County Farmers Breakfast at Pewter Hall in Brownstown.

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Michael Langemeier with Purdue University’s Department of Agricultural Economics said one of first things most economists are taking a close look at now are acreage decisions based on the prices of the two largest crops grown in the Corn Belt.

“In 2018, we planted as many soybean acres as we did corn acres in the United States,” he said. “It was a record number of soybean acres. We certainly don’t think there is going to be a repeat of that in 2019 given the prices where soybeans are at relative to corn.”

Langemeier said corn futures for the fall of 2018 were fairing well until the spring when trade concerns with other countries, especially China, arose.

He said China grows enough corn to meet its own needs but buys a lot of soybeans from the United States and others around the world to feed their chickens and hogs. That had an indirect impact on corn prices and wheat to some extent.

The good news is that by the fall of 2018, corn prices had rebounded to nearly as high as they had been in the spring, Langemeier said. Recent corn futures have been at about $3.80 per bushel, he said.

“… and better news yet, if you look into December 2019 future prices, we have been trading around $3.95 or $4.05,” Langemeier said. “That’s stronger prices than we have seen for a while. So really this morning, I have some good news and some bad news.”

Although strong yields this past year have kept corn prices lower than they might have been, corn inventories have been tighter because more soybeans have been planted and harvested in recent years, he said.

Soybeans, however, had trouble rebounding after future prices of $10.35 a bushel in late May 2018 after the trade concerns surfaced, he said.

“We lost $2 (a bushel),” Langemeier said.

Prices did climb back up a dollar from the low, he said, but continuing concerns about trade issues with China are holding prices down.

“You’re probably not going to see a large increase in soybean prices,” Langemeier said.

Part of the issue is that there is an extremely high inventory of soybeans that even if the United States starts trading with China, prices won’t rebound to above $10 a bushel any time soon, he said.

“We’re still looking at the low nines,” Langemeier said. “We’re certainly in a different environment when looking at corn and soybean prices.”

Langemeier also discussed the Ag Economy Barometer, the result of a collaboration between Purdue University’s Center for Commercial Agriculture and the CME Group. Its purpose is to provide a monthly nationwide measure of the health of the U.S. agricultural economy.

Purdue analyzes and reports the result of each month’s Ag Economy Barometer value, and it is published the first Tuesday of every month. Information about the barometer, started in late 2015, is available at ag.purdue.edu/commercialag/ageconomybarometer.

He said the barometer is based upon surveys of 400 agriculture producers in the country, heavily weighted by corn and soybean producers.

“Because those crops are so important to the value and production of agriculture in the United States,” he said.

The survey consists of five questions asked of each person surveyed, which takes about 10 to 15 minutes a month, and the questions remain consistent.

The survey focuses on the sediment of producers about the future, which can drive land values and asset purchases, Langemeier said.

“If people are relatively optimistic, particularly long term, that holds up land values,” he said. “If they turn relatively pessimistic, both short term, intermediate term and long term, that means land prices are probably going to come down.”

Before Langemeier spoke, attorney Denise Connell with Lorenzo, Bevers, Braman and Connell in Seymour talked about estate planning and how the community foundation could help.

A number of area businesses and service providers involved with the farming community served as sponsors of the free breakfast along with the foundation and Purdue Extension Jackson County.