Corn growers have seen some pretty good prices over the past several years, but the downward trend this past year for a record crop is expected to be the norm for the next several, according to Patrick Westhoff, director of the Food and Agricultural Policy Research Institute (FAPRI).
Speaking at the American Farm Bureau meeting last week, Westhoff said that due to corn prices dropping to levels not seen in years, farmers will plant less corn in the next two years. More than 90 million acres were planted in 2014 and he expects less that 88 million acres will be planted this year. While Westhoff expects average corn prices to remain low by 2007-2012 standards, “but still well above the level we saw before 2007.”
The demand picture for corn is high on the livestock side, but low on the ethanol side. “We have global demand growth in the animal sectors, here and around the world,” said Westhoff. “But perhaps weaker growth, if any at all, in biofuels – depending on policy, oil prices and a lot of other things we can’t possibly know.”
On the export side, Westhoff says there is a lot more competition. “The high prices of the last several years kicked off lots of supply from Ukraine to Argentina and that’s not all going to go away over night,” he said. And while China is a huge source of demand growth, Westhoff says “the good news is it’s growth, but the bad news is it’s not as fast as it has been. They’re looking at 6.5 percent growth next year.”
Westhoff concludes that the ups and the downs are always dependent on factors beyond our control. “As always, weather, oil prices and other factors will drive annual swings in prices.”
Listen to Dr. Westhoff’s comments here: Presentation on crop outlook by Dr. Pat Westhoff, FAPRI