The farm economy and commodity prices may have hit bottom last year, but don’t expect a full rebound right away.
Instead, look for a slight increase in farm income.
“I think we can get a little bit of a revenue increase and a little bit of a cost decrease when we look across the sector as a whole,” Bob Young, chief economist for the American Farm Bureau Federation, said. “I think we may see–I’m only talking about 2017–income up maybe a couple billion dollars or so, from 2016 out of 65, 70 or so.”
Many factors could sway the market, but none of those are likely to cause much price movement for row crops.
“I just am very hard-pressed to see much of a price move on the wheat front. Cotton prices have had some movement there and if we do end up with this big crop that we say we are going to get, I think cotton prices are sideways, maybe down a little bit,” Young said.
If he were a row crop grower, Young said he’d watch the wet, cool conditions many are experiencing.
“It won’t surprise me that if these stay around for another couple of weeks or so in the Midwest, that we’ll begin to get some concerns on corn plantings, for example,” Young said.
Farmers’ concerns and commodity prices will be discussed as farm bill negotiations continue in Washington, D.C.
“We’re talking about a budget situation for agriculture that’s very tough, very tight [with] very small amounts of money in the Congressional Budget Office’s projections on what we’ll spend on the cotton program [and] on the dairy program, for example,” Young said.
The situation will make writing policy for those commodities very tough moving forward, Young said.