Farmers Bracing for Price Drop

Over the past several years, commodity prices have increasingly risen, driving up food prices and expanding farmers’ profit margins. This era of high crop prices may be coming to an end, some experts predict, and much faster than many are prepared for.

Thanks to increased international demand and low supply, partly caused by a string of poor weather patterns experienced across the globe, American corn prices have reached record highs. The increased federal attention to ethanol production has also helped drive up demand, enriching many farmers and driving up food prices.

Last summer corn prices reached a record high of $8 a bushel and overall American farm income topped $100 billion in 2011. The overall success of the farm sector stood out amongst the global recession, leading some optimists to predict a new golden age of farming.

The good times may be rapidly ending, however, as American farmers prepare to plant the largest commodity crop in a generation. The increased production at home and abroad could vastly expand corn stockpiles and could cause prices to drop by as much as 20 percent this year.

In addition to falling crop prices, rising fuel costs could undermine many farmers’ financial wellbeing. With gas prices nearing a national average of $4, new pressures are likely to be added to the farm economy.

Some farmers are still optimistic. Many are flush with cash after last year’s record farm incomes. In addition, given the current record highs, a price slump would likely still leave farmers in a good position.

To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting .

Follow us on: Twitter

Written by: Justin Ellison / Farm Plus Staff Writer