(West Lafayette, IN) - The recovery in grain prices should extend into next year but inflation could eat more into the higher profits belt tightening farmers have started to enjoy. That was among the messages conveyed during the monthly Purdue University Corn and Soybean Outlook webinar on Monday.
Michael Langemeier, Associate Director of the Center for Commercial Agriculture at the West Lafayette campus, said higher prices collected by food producers, traditionally, leads to greater demand for farm machinery and buildings. However, Langemeier said major purchases during the current rebound in prices might not happen to the same degree if inflation burns a larger hole in the deeper pockets of farmers.
He said the recent increase in fuel prices and land values are early indications that inflation could become a major issue but what impact that might have in areas like cost of fertilizer and renting land to farm are still not known. "That’s a wild card right now,” Langemeier said. He said the current upward pressure in the price of land on the market is caused by farmers with more money to spend wanting to expand their operations.
According to the latest USDA forecast, the harvest price for this year’s corn is expected to average $5.60 per bushel. USDA predicts the harvest price for soybeans to average $13.55. Langemeier said corn and soybean prices have dipped slightly recently but should be relatively strong at least through much of 2022.