Grain, livestock prices forecast to drop this year

In recent years, farmers have seen record prices and profitability, but the tide may be turning.

The annual value of U.S. agricultural production is expected to fall 2.1 percent in 2016 because of declines in the value of crop and livestock production, the U.S. Department of Agriculture (USDA) reported.

The value of U.S. livestock production is forecast to drop 4.6 percent in 2016, according to the USDA. In a news release from the University of Missouri Extension, agricultural economist Scott Brown said cattle, hog and dairy producers will see lower prices across the board this year.

Hogs will be down $3 to $4 per hundredweight, having dropped $30 between 2014 and 2015. Fed cattle prices will drop to around $120 per hundredweight, down from over $140 a year ago. Dairy prices will drop a dollar to $16 per hundredweight, Brown said.

Grain, too, has a similar outlook.

The USDA predicts a modest drop in crop prices in 2016.

"One could suggest we're going to have lower corn, soybeans and wheat prices," Brown said in the release.

"A lot of that is going to hinge on what kind of weather we have as 2016 unfolds."

With good spring weather, Brown said farmers likely will plant more than 90 million acres of corn, which will put pressure on prices.

"Because prices for agricultural commodities are lower, many folks are struggling with price risk management," Brown said in the release. "So they aren't as excited about locking those prices in. But I will remind them that prices can go lower from where we are today."

Farmers aren't the only ones who will feel the effect of a decline in crop and livestock values. Seed, pesticide, and fertilizer expenses together are expected to decrease by about $1 billion in 2016, according to the USDA. Feed expenses, too, will decline.

"I think rural communities are going to feel some of the changes that are coming," Brown said.

bbrown@semissourian.com

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