A crops market specialist at Iowa State University says farmers can expect to see lower grain prices this year because of abundant production that could result in more than $2 billion in losses at harvest time.
Record corn and soybean yields in 2014 have lowered demand and caused prices to drop.
“It’s not necessarily a major problem, but (farmers) are going to have to figure out how to run their businesses given the lower prices now,” said Chad Hart of Iowa State University.
“Some of that price drop is offset by the larger production in the last couple of years, so it is not that they are suffering the full hit of the price drop, because they do have some extra bushels to sell.”
In Iowa, corn prices hit a record average high of $6.94 per bushel in the 2011-12 marketing year. Soybeans saw a record average of $14.54 the same year.
But Hart said current price levels are often less than half what they were two or three years ago.
Farmers “will have that previous income from the past couple years that will help fill in the hole, and then there’s a fairly good safety net that exists for producers through the Farm Bill and crop insurance,” Hart said.
Iowa grain producers faced with declining prices