Financial Pressure on Farms Likely to Continue

The latest analysis of national and global agricultural trends from the University of Missouri indicates continued financial pressure on United States farm sector. Good news in the report includes a modest recovery in grain prices in 2017. The March 2017 U.S. Baseline Briefing Book by economists at the University of Missouri provides projections for agricultural and biofuel markets, based on market information available in January. The report’s macroeconomic assumptions are based primarily on forecasts by IHS Global Insight, which suggest moderate growth in the U.S. and global economies.   “The world is an uncertain place, and commodity markets will continue to be volatile,” says Patrick Westhoff, director of the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri. “We use our models to develop a range of projected market outcomes that takes into account some major sources of uncertainty about future supply and demand conditions. In some of the resulting 500 outcomes, prices, quantities and values are much higher or much lower than the averages reported here.” Projections contained in the Briefing Book include declines in corn and wheat acreage and production in response to price decreases brought on by record production in 2016. Projected corn prices increase to $3.60 per bushel for the 2017‐18 marketing year and $3.71 per bushel for the period from 2018 to 2026. Meanwhile, shifts in relative prices are likely to push up soybean and cotton acreage in 2017. Strong export demand has supported soybean and cotton prices in 2016‐17, and projections have soybean prices averaging $9.57 per bushel in 2017‐18