Mid-Year Agricultural Economic Outlook #1: Commodity Prices
Mid-Year Agriculture Economic Outlook
While the here-and-now farming responsibilities of growing this season’s crops seem to be taking center stage, quietly in the background the forward-thinking strategic work for next year is already underway. This is the time when leases are negotiated, crop planning begins, and even forward input prices are locked down. And having a sound understanding of the state of the agricultural economy better positions us to succeed in all these proactive endeavors. To that end, Scythe & Spade will be posting a series of four production agricultural economics updates and outlooks, beginning here with current and USDA forecast crop prices. This will be followed by crop input prices, farmer sentiment outlook, and farmland prices.
Details below are well worth the read but a quick summary of current and expected crop prices is as follows:
24/25 crop year average grain prices are projected by USDA to be little changed to down slightly from the 23/24 crop year average prices
25/26 crop year (currently in the field) average prices are forecast to be up 1% - 7% depending on the crop, but all remain well below the five-year averages.
Russet potato, yellow onions, and national average alfalfa hay prices have reverted to or below 2020 pandemic level lows, also well below their five year averages.
Commodity Price Outlook: Farm profitability begins with the prices received for commodities. The USDA-ERS Season-Average Price Forecasts is a model that projects national average prices received by farmers and offers a solid estimation for future commodity prices as seen as 24/25 projected market year average price in the chart below.
King corn offers the strongest indicator of commodity economic position and is known to lead competing commodities in price movement. USDA-ERA’s estimated 24/25 corn price of $4.33 is only $0.02 higher than the reported 23/24 market year and is still $0.86 lower than the 5-year average.
Across the board we are seeing lower row crop prices for the 24/25 marketing year. And while improvements are predicted for the 25/26 year, as seen below, they are only slight.
The story is the same even for more regionally specific crops such as potatoes, onions, and sugar beets. Sugar beets in Idaho’s Magic Valley are reported to be going for $35.00/ton for the 2025 crop, about half of what was received last year. Potatoes and onions in the meantime have reduced to pandemic level pricing, $6.60 and $7.00, $6.60 and $10.07 below the 5-year average prices respectively.
