By KAREN BINDER
Illinois Correspondent MOUNT VERNON, Ill. — With corn showing as the largest growing and strongest ag market, and soybeans seeing a “phenomenal” year, Darrel Good shared signs of a recovering farm economy at the Illinois Farm Economics Summit.
“I’m assuming the worst is over and that we are starting a slow recovery. I’m also assuming implicitly that we still have some sharp recessionary pressures to overcome,” Good said last Friday.
His comments are based on 29 years of experience watching ag markets as an University of Illinois ag economist, shared during the last of five sessions hosted statewide by the UoI. Each summit sought to help producers navigate economic challenges to realize better profitability.
The summit presented experts who discussed direction of prices, outlook for farm returns, impact of speculation on farmer marketing decisions, climate change policy, farm programs and crop insurance and implications of the economic crisis for agriculture.
“A major issue this past year was the impact of the sharpest worldwide recession since World War II,” Good said. “Combined with rising input prices, planting delays and H1N1 fears, this was a year of tremendous uncertainty by any standard.”
Affecting corn estimates this year is the higher percentage of unharvested crop, as well as recessionary pressures from higher prices, he said, adding that he expects the year to end about equal to 2007 – figures which will not be reported by the USDA until June 12.
Ethanol demand for corn was supported by larger ethanol production mandates in 2010 and much higher ethanol prices; yet, export and domestic feed demand were weak.
But Good pointed out corn exports were up dramatically in the previous four weeks alone.
He does project corn prices will be supported in 2010 and 2011 by a combination of “relatively small inventories, increasing ethanol mandates, modest economic recovery and higher rate of inflation.” He looks for the average corn prices in Illinois to be near $3.80 for 2009-10 and near $4 for 2010-11.
Already with 80 percent of soybeans on the books in 2009, Good said this year’s record harvest is expected to result in some increase in stocks by the end of the 2009-10 marketing year.
“Exports have been nothing short of phenomenal. It’s unbelievable how much we’re shipping,’’ Good explained, adding that Brazil’s failed crop and China’s increased sales are factors.
The average farm price for soybeans in Illinois is expected to be near $9.80 this marketing year and near $10 for the 2010-11 year. “Obviously this will curtail as Chinese sales from the U.S. slow, as they buy from other countries and as South American crops rebound,” Good said. About wheat, he noted world production was large in 2009, even though the U.S. crop was slightly smaller than in 2008. Export demand for soft red winter wheat became extremely weak in the last half of 2009.
Illinois wheat producers received an average $5.89 for the 2008 crop, but the 2009 crop will likely be close to $3.90, Good said. To see detailed information about summit presentations, go online to www.farmdoc.uiuc.edu/presentations/IFES_2009 |
