Worst year since 2007 for US maize farmers

By Elizabeth Schroeder | 3 November 2024 | 9:00 am

The US Federal Reserve’s latest Beige Book report published on 30 October has indicated that maize farmers could be experiencing their worst year in almost 20 years.

According to the Agriculture Dive website, economists were saying that crop prices remained “unprofitably low”.

Michael Langemeir, a professor of agricultural economics at Purdue University in West Lafayette, Indiana, told Agriculture Dive that the report largely “confirmed things we were already thinking”.

“This is one of the worst years for maize and sorghum prices since the ethanol boom began in 2007,” he said.

The report added that the high input costs that followed the COVID-19 pandemic had d a more difficult environment for crop farmers. However, the lower crop prices had proven to be a boon to the livestock industry due to reduced feed costs.

Although the US Department of Agriculture initially estimated that farming income would fall sharply by 26% this year, it revised its projections for 2024 late last month, estimating that a 4% decline could be expected. This came largely on the back of higher egg, beef and dairy values.

Despite the revision being an optimistic sign, Agriculture Dive said “the general data is masking a hard year for many farmers”.

According to Langemeier, the beef and dairy sectors, in particular, were doing really well, but the crop sector “does not look very good”.

The Beige Book report said agricultural activity was “flat to down modestly, with some crop prices remaining unprofitably low”.

In addition to the lower prices, drought conditions emerged in parts of Texas, while the damage from Hurricane Helene was running into billions of dollars in losses in the south-east of the country.

Agriculture Dive reported that due partly to oversupply in the global market, mainly from Brazil, farmers were currently earning less than US$4 (about R71) per bushel for maize after prices fell sharply from more than US$7 (R124) per bushel during the past two years.

Soya bean prices also plummeted from US$13 (R230) per bushel to US$10 (R177) per bushel in 2024 alone.

Purdue University’s Ag Economy Barometer further confirmed that farmer sentiment had reached its lowest point since March 2016.

“Many [farmers are] growing increasingly worried about market factors such as commodity prices, input costs and trade prospects ahead of the upcoming election,” the report said.

An economic report by Iowa State University indicated, however, that “while farmers can expect declines in net farm income to continue, some commodities may have already seen their low spot”.