FORT WAYNE — The corn boom is over.
According to projections given by Dr. Chris Hurt, a Purdue agriculture economist, corn prices for next year’s harvest will be just $4.50 per bushel, or below the break-even point for the average Indiana farmer.
“We are going to go through a period of moderation and this period of moderation is going to be something we can adjust to,” Hurt, a farmer himself, told the audience in a packed room Wednesday at the Fort Wayne Farm Show. “This is a landing, a coming down, a tightening of margins, a resetting of some of our expectations, but it is not... a crash.”
Hurt said the average price received for a bushel of corn by Hoosier farmers in 2013 was also $4.50, which is far below the $7 per bushel average in 2012. With rising input costs, land rent, taxes and other fees included in the formula, Hurt said the hypothetical net return per acre for Indiana corn farmers this year will be a $65 loss.
Those farmers and agriculture business that are locked into long-term contracts, such as land rent, without adjustments available, will be hurt most by the decline in harvest prices, according to Hurt. He said farmers will have to control their costs and try to negotiate lower land rental rates.
He also forecast the corn price will not bounce back in 2015, and may even drop to $4.30 per bushel.
The Associated Press reported last week that more farmers are shifting to soybeans after record years of corn planting, but Hurt anticipates that prices for soybeans will also slip from $14.50 per bushel in December 2013 to $12.50 this year and $11.25 in 2015.
“We are going to have to put downward pressure on the cost of production,” Hurt told the farmers.
Overall income for Indiana’s corn and animal farmers is expected to continue the downward trend that began in 2011. In 2011 farm income reached a record $3.9 billion, according to Hurt. Farm income in 2013 was $2.5 billion and is expected to be $2.3 billion this year. That income will be the sixth highest of the past 12 years.