Market News & Headlines >> Softer Ag Economy But Still Bright
USDA’s economists also expect lower crop prices this year and are using $3.90 corn, $9.65 soybeans, $5.30 wheat, $15.90 rice and 68-cent cotton in their projections. As a result, they project acreage planted to the top eight row crops falling just shy of 1% in 2014, mainly coming out of feed grains as rice, cotton and soybeans increase.
High livestock prices (a record $136 for steers, $63 for hogs, 97.5 cents for broilers and record $21.20 for milk) will help offset reductions in crop income in the overall farm sector.
Net cash income for 2014 is estimated at $101.9 billion, down almost 22% from last year, but still the fourth highest on record. Keep in mind that direct payments worth 5 billion are stripped out of the farm economy this year and payments under the new farm bill programs – if any -- won’t be issued until 2015 (after the entire 12-month 2014 crop year is over).
Clearly, this year, as always, the impact of changing prices will affect farmers very differently.
Longer term, USDA economists are still bullish U.S. agriculture based on continued growth in world demand and potentially stronger demand for U.S. products if current trade negotiations succeed. The Trans-Pacific (initially 12 countries but open to new members) and Trans-Atlantic (U.S.-EU) trade pacts would give U.S. products new access/advantages in two-thirds of the world market.