Purdue University’s Department of Agriculture has released its 2020 ag forecast with projections in international trade, crop production and land values.
Farmers will likely face a tough decision over the winter about the amount of corn or soybeans to plant this spring with the market possibly pushing Hoosier farmers closer to a 50-50 split between the two staple crops.
Despite tough planting conditions, farmers saw higher yields than originally expected, and did not see a spike in prices for corn and soybeans this year. Until the trade war with China, soybeans have been more profitable for farmers to plant than corn the past few years.
However, Purdue University agricultural economist Michael Langemeier says the trade disputes and carryover of crops will challenge farmers having to determine which to plant next year.
“For '19 and '20, it’s almost the same profitability for corn and soybeans,” says Langemeier. “So much tougher decision for people in 2020, than we’ve seen in recent years.”
With corn and soybean prices likely to remain low, farm profitability will continue to be tight. Experts in the report predict farm incomes will stay about the same as 2019.
While land values have declined, experts forecast land value to stay about the same, if not slightly increase in 2020. Langemeier says he expects cash rent leases to hold steady this next year.
“As long as people are expecting net return to land to be at or higher in the near future, we can argue cash rents will be stable, at least stable,” he says.
Experts in the report say data could suggest that farmers have seen the cash rent bottom out over the past few years, but do not see it increasing in 2020.