by: Chris Zoller, Extension Educator, ANR in Tuscarawas County
The United States Department of Agriculture Economic Research Service has projected agricultural production through 2030. This comprehensive document reviews production, income, and trade projections for major agricultural commodities. The complete document is available here: https://www.ers.usda.gov/webdocs/outlooks/100526/oce-2021-1.pdf?v=4987.6. This article provides a highlighted summary of corn and soybean price, use, and export projections to 2030.
Assumptions
The projections detailed in this report are based on several assumptions, including those related to the most recent Farm Bill, trade policy, international policies, biofuels, and macroeconomic implications, among others. Many factors can change these projections, but the report does provide some insight to future agricultural pricing and production.
U.S. Corn and Soybean Projections
Increasing needs globally for diversified diets and protein sources will continue to impact grain production income, as will trade tensions and the value of the U.S. dollar. Returns over variable costs are projected to be on an upward trend for most crops. Corn and soybean production is expected to end the period at record levels. The figure below is a projection of prices to 2030 for corn, soybeans, and wheat.
While corn acres are projected to decline, it is expected that increasing yields will make up for the acreage decline. Corn for ethanol is expected to increase at a slower rate than during the most recent period. The USDA ERS projection to 2030 forecasts corn for food and beverage uses to keep pace with population growth. Export markets appear to remain favorable to U.S. corn producers. The figure below displays U.S. corn use for food and beverage, ethanol, and exports.
South America will continue to be a strong competitor for U.S. soybean producers with respect to soybean meal and soybean oil. The projection to 2030 expects increasing use of soybean oil for biodiesel production, assuming it meets requirements of the Renewable Fuels Standard. Soybean meal and oil for domestic use is seen to remain steady over the projection period. The figure below represents expectations for soybean domestic use and export through 2030.
Summary
This article provided a very brief overview of the USDA ERS projections for corn and soybean pricing, use, and exports to 2030. Several assumptions are used to make these projections, and many factors can change in the next decade to alter these projections. However, this information can be useful in long-term planning and business analysis.
The following OSU Extension resources may be of interest and use as you conduct financial planning:
- Ohio Farm Business Analysis & Benchmarking Program https://farmprofitability.osu.edu/
- Enterprise Budgets https://farmoffice.osu.edu/farm-management/enterprise-budgets
- Custom Rates & Machinery Costs https://farmoffice.osu.edu/farm-mgt-tools/custom-rates-and-machinery-costs
Please contact your local OSU Extension Agriculture and Natural Resources Educator for additional information and assistance.