The Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri has released its August 2023 update to its annual agricultural market outlook report. The report indicates that agricultural commodities that saw peak prices in 2022 could see a decline in 2023 and possibly into 2024.
The report highlights several factors that are contributing to this potential slowdown. Changes in global grain production, tightening monetary policy, and decreasing input costs have impacted the prices of various farm products in the United States. Corn, soybean, wheat, and cotton prices have already been subject to fluctuations due to global market impacts and changes in domestic production. If growing conditions allow crop yields to recover to trendline levels, these prices could decline further in 2024-25.
The report also mentions that the decrease in cattle numbers due to drought has driven up cattle prices. It is projected that cattle prices will reach a record high in 2025. On the other hand, fertilizer prices showed a significant increase in 2022 but have since retreated. With projected prices for fertilizer and other inputs, production costs for corn and other crops are expected to decline further in 2024 and 2025.
In terms of consumer food prices, there was a significant increase of 9.9% in 2022, the highest rate in decades. However, the report suggests that year-over-year increases in food prices have slowed down in recent months. The annual average increase in the food consumer price index (CPI) is projected to be 5.9% in 2023 and 2.5% in 2024.
The FAPRI report also provides projections related to biofuel production, and further analysis on the production of other crop and livestock commodities. FAPRI director Pat Westhoff emphasizes that the baseline projections serve as benchmarks for evaluating the impacts of agricultural policy changes and other market factors.
The August baseline update offers a summary of 10-year projections for various economic indicators including farm income, farm program spending, and domestic commodity markets.
– Food and Agricultural Policy Research Institute (FAPRI)
– University of Missouri – College of Agriculture, Food and Natural Resources (CAFNR)