Quote "the boom times have ended. And smart producers are forward contracting their crops and locking in prices well into 2015 to ensure some level of profit.
"There will be a tremendous readjustment that plays out over the next five years," says Dan Basse, president of AgResouce Company in Chicago.
Corn producers have become accustomed to making $200 to $400 per acre above breakeven. Going forward, Basse says, average income over cost levels will land somewhere between a $30 profit and a $30 loss.
"What’s happened is that everyone in the ag industry has had his hand in the farmer’s pocket," says Basse.
Fertilizer costs, land rents, machinery and equipment costs have all combined to raise the breakeven on corn to somewhere between $4.35 and $4.85 per bushel, he says.
"The key point is that the cost side is where the farmer is being squeezed," he adds.
Basse expects spot corn prices, Chicago, to drop to $3.50 in 2014, and then to as low as $2.75, possibly lower, by 2015."
"There will be a tremendous readjustment that plays out over the next five years," says Dan Basse, president of AgResouce Company in Chicago.
Corn producers have become accustomed to making $200 to $400 per acre above breakeven. Going forward, Basse says, average income over cost levels will land somewhere between a $30 profit and a $30 loss.
"What’s happened is that everyone in the ag industry has had his hand in the farmer’s pocket," says Basse.
Fertilizer costs, land rents, machinery and equipment costs have all combined to raise the breakeven on corn to somewhere between $4.35 and $4.85 per bushel, he says.
"The key point is that the cost side is where the farmer is being squeezed," he adds.
Basse expects spot corn prices, Chicago, to drop to $3.50 in 2014, and then to as low as $2.75, possibly lower, by 2015."