by: Chris Zoller, Extension Educator, ANR in Tuscarawas County
The United States Department of Agriculture (USDA) released its Agricultural Projections to 2032 report in mid-February. This article will highlight the crop portion of the report. The full report is available here: https://www.ers.usda.gov/webdocs/outlooks/105853/oce-2023-01.pdf?v=1029.
This report is based on data available as of October 2022 and is made using several assumptions. These include, but are not limited to, macroeconomic factors, a continuation of the 2018 Farm Bill, normal weather, and several others. It is not to be considered a forecast. Rather, the report is to be used as a baseline.
The figure below shows prices of corn, soybeans, wheat, and cotton for the period 2002 – 2032. Corn prices are expected to fall from the present levels to $5.70 per bushel in 2023/2024 to 2026/2027 to $4.30 per bushel in 2032/2033. Any growth in corn demand is expected to come from feed and residual use, primarily from demand to feed beef, pork, and poultry.
Baseline projections for soybeans are like corn. Soybean prices will drop from their current highs to settle at $13.00 per bushel in 2023/2024. This downward trend is expected to continue until settling at $10.30 per bushel in the 2032/2033 marketing year. Expect modest increases in soybean crush to keep pace with soybean oil and meal demands.
Wheat, like corn and soybeans, is expected to decline in price over the projection period. Wheat is projected to fall from a high of $9.20 in 2022/2023 to $5.70 per bushel by the end of the projection period.
The Baseline projection from USDA shows relatively no change in planted area of the eight major crops (corn, soybeans, wheat, barley, cotton, oats, rice, and sorghum). The figure below demonstrates planted area from 2002 – 2032. Rising yields of corn, soybeans, and wheat will compensate for steady or declining acres planted.
Feed and Residual, Ethanol, & Exports
The figure below projections for grains used for feed and residuals, ethanol, and the export market. Feed and residual and exports are expected to see the greatest increases, with ethanol use projected to remain level.
As the report outlines, these projections are based on several factors that likely will change. Some are within your control, while many are not. Let’s assume the price projections, for instance, are correct. Can you remain or become successful at these prices? What implications do these projections have for your farm business? What can you do to prepare?
Consider the following suggestions:
- Complete a financial analysis of your farm and enterprises: https://farmprofitability.osu.edu/
- Refer to enterprise budgets from OSU Extension: https://farmoffice.osu.edu/farm-management/enterprise-budgets
- Set goals for your business: https://ohioline.osu.edu/factsheet/anr-45
- Identify the Strengths, Weaknesses, Opportunities, and Threats: https://ohioline.osu.edu/factsheet/anr-42
- Conduct family business meetings: https://farmoffice.osu.edu/sites/aglaw/files/site-library/Webinars/Business-Meetings-zhp368.pdf
- Speak with your lender, input suppliers, Extension Educator, and other trusted advisors
Managing a successful farm business is no easy task. However, there are many people, resources, and tools to help you chart a course for long-term success. I encourage you to