2023 had surprising results after a seemingly poor growing season. U.S. farmers are currently facing increasing export competition in a declining price environment. What will this mean for producer margins in 2024?
Dr. Robert Maltsbarger of the Food and Policy Research Institute (FAPRI) at the University of Missouri, recently presented a 2024 Grain and Oilseed Industry Outlook. Read on for the key takeaways from FAPRI’s 2024 baseline, which provides an outlook for U.S. crops, livestock and farm income this year.
Corn
- Domestic corn demand is expected to remain relatively stable, with ethanol use declining slightly in the long term.
- Feed use is tied closely to livestock numbers, especially cattle.
- Exports face headwinds from competition, especially from Brazil whose second corn crop planting was down due to El Niño expectations.
- Production costs remain elevated, especially fertilizer, though down from 2022 peaks.
- With trend yields and reduced acres, 2024 corn production is projected below 15 billion bushels.
- Prices are easing from 2022/23 peaks but remain above pre-pandemic levels.
Soybeans
- Renewable diesel policies are increasing soybean oil crush demand, supporting oil prices but pressuring meal prices as more meal is produced.
- Brazil remains the top soybean exporter but U.S. exports could find support from crush demand.
- With more planted acres and trend yields, 2024 production could set a new record over 4.5 billion bushels.
- Like corn, soybean prices are easing from peaks but remaining profitable levels.
- Net farm income is projected to decline in 2023 and 2024 from the 2022 record as expenses remain high while crop and livestock receipts contract.
Livestock
Beef production is expected to decline for the first time since 2015 as drought conditions reduce cattle numbers. However, strong cattle prices should remain for a few years even as the cattle cycle hits its lowest point in 2025/26 before slowly rebuilding. Dairy faces better profitability in 2024 as feed costs ease.
Policy
Dr. Maltsbarger expects a new Farm Bill or extension to pass in 2023 to avoid reverting to "permanent" law. However, any increases to commodity program support will require offsets from other titles.
In summary, while easing from peak levels, crop prices should remain relatively profitable in 2024 amid high input costs. However, margins will tighten, requiring strategic marketing of crops. The cattle sector should remain relatively strong for a few years despite cyclical herd declines.
To dive deeper into the above topics, review the 60-minute webinar recording along with the presenters’ PowerPoint slides, or read Dr. Maltsbarger’s 2024 Grain and Oilseed Industry Outlook.
Watch the Webinar Recording
Read the 2024 Grain and Oilseed Industry Outlook Report
Tags: outlook, ag economy, cash field
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FAQs
U.S. Feed Grain Supplies Are Expected To Increase in 2024/25
Larger supplies are expected to prompt greater feed grain use, and ending stocks are projected higher for 2024/25, at 56.4 million metric tons, up 2.3 million metric tons from the already large ending stocks estimated at the end of 2023/24.
What is the crop outlook for 2024? ›
After six years of successive reductions, beginning stocks are forecast to increase in 2024/25 to 658 million bushels, an increase of 15 percent from the previous year. A larger crop and higher beginning stocks are expected to raise 2024/25 supplies by six percent to 2,678 million bushels.
What are the USDA planting intentions for 2024? ›
WASHINGTON, March 28, 2024 – Producers surveyed across the United States intend to plant 90.0 million acres of corn in 2024, down 5% from last year, according to the Prospective Plantings report released today by USDA's National Agricultural Statistics Service (NASS).
What is the USDA corn price forecast for 2024? ›
The season-average farm price is projected at $4.40 per bushel, down 25 cents from 2023/24. The 2024/25 global coarse grain outlook is for record production and use, and fractionally lower ending stocks.
Will the market be better in 2024? ›
As a whole, analysts are optimistic about the outlook for stock prices in 2024. The consensus analyst price target for the S&P 500 is 5,090, suggesting roughly 8.5% upside from current levels.
What is the future outlook for agriculture? ›
The OECD-FAO Agricultural Outlook projects that demand for food, agriculture and fisheries products will continue to grow over the next decade. However, growth will be at a slower pace than in the recent past, when exceptionally strong growth in China and the largely policy-induced expansion of biofuels spurred demand.
What is the wheat outlook for 2024? ›
U.S. wheat ending stocks in 2024/25 are projected at 766 million bushels, up 11 percent from 2023/24, which would be the highest level since 2020/21. Total supplies are up 6 percent from the previous year with larger beginning stocks and production more than offsetting lower imports.
What is the economic outlook for 2024? ›
Global GDP growth is projected at 3.1% in 2024 and 3.2% in 2025, little changed from the 3.1% in 2023. This is weaker than seen in the decade before the global financial crisis, but close to currently estimated potential growth rates in both advanced and emerging market economies.
Will corn or soybeans grow in 2024? ›
Corn ending stocks for 2024/25 are projected at 2.53 billion bushels, with soybeans at 435 million bushels. Corn stocks-to-use would be 17.2% and soybeans 9.9%. Neither stocks-to-use ratio is price friendly. USDA projected the 2024 national average corn price of $4.40 with soybeans at $11.20.
Can the USDA shut down a plant? ›
FSIS also can force a plant to cease operations by suspending official inspection. For information about recalls, visit FSIS Recalls or telephone the United States Department Agriculture (USDA) Meat and Poultry Hotline toll-free at 888-MPHOTLINE (888-674-6854).
President Biden signed $460 billion bipartisan spending package over the weekend.
What has allowed agriculture to grow so much in the last 30 years? ›
Innovations in animal and crop genetics, chemicals, equipment, and farm organization have enabled continuing output growth while using much less labor and farmland.
What is the grain outlook for 2024? ›
Production is also forecast to increase for a second year in 2024-25, with world grain production pegged at 2.32 billion tonnes on stronger wheat production, although estimates were 10 million tonnes less than last month due to weaker US corn production.
What will the grain prices be in 2024? ›
USDA's most recent cost estimate for 2024 is $870 an acre, a 28% increase from the years when ending supplies were similar to today and December corn prices traded roughly between $3.15 and $4.50 a bushel.
What is the agriculture industry outlook for 2024? ›
CHICAGO, May 14, 2024 /PRNewswire/ -- According to a research report "Global Agriculture Industry Outlook 2024 - Feeding the Future Through Innovation" published by MarketsandMarkets, the Top 10 Agriculture Markets Will Grow From USD 81.5 billion in 2023 to USD 94.3 billion by 2024 at A YOY Increase of 15.7%.
What is the outlook on wheat prices? ›
Quotes are daily. Source: USDA, Economic Research Service calculations using data from the International Grains Council. Ending stocks are projected higher and the season-average price is forecast at $6.00 per bushel, the lowest since 2020/21.
What are futures in grain markets? ›
What Are Grain Futures? Grains are agricultural commodities such as corn, soybeans and wheat. Grain futures are legally binding contacts for the delivery of a particular grain for a specified price at some point in the future.
What is the outlook for organic grain? ›
The organic grain farming market size has grown strongly in recent years. It will grow from $46.53 billion in 2023 to $50.51 billion in 2024 at a compound annual growth rate (CAGR) of 8.6%.
What is the outlook for global grains? ›
"Including cuts for maize (mainly in Argentina, sub-Saharan Africa) and wheat (Russia, Ukraine, the US), the projection for global grains production in 2024/25 is down by 10m t m/m, to 2,312m, up by 1% y/y (year-on-year)," the report states.
