Clements: USDA spring discovery prices, which the department uses to recalibrate crop insurance prices, show little change for 2018. Announced at the end of February, the prices are determined by averaging futures contract settlements during a month-long period. American Farm Bureau Federation market intelligence director John Newton explains what the price projections mean for corn, cotton and soybean farmers.
Newton: The spring prices came in at $3.96 per-bushel for corn, 76 cents per-pound on cotton, and $10.16 per-bushel for soybeans. For corn, it’s unchanged from last year. For soybeans, it’s down about three cents per bushel. And for cotton, it’s pretty much in line with what we saw last year, but it is the highest spring price that we’ve seen since 2014.
Clements: Newton says the prices indicate 2018 will again be a difficult year for many farmers.
Newton: Quite frankly, it’s still a pretty challenging environment for a lot of growers. These prices remain well below what they were historically. It’s really going to be a tough marketing year. But there is an opportunity for these prices to move higher in the event that we have any type of adverse weather. So, while these spring prices are lower, they’re not set in stone on the crop revenue protection policies.
Clements: Newton says the soybean-to-corn price ratio remains high, indicating a possible shift to more soybean acres this year. However, USDA expects both corn and soybean acreage to decline.
Newton: So, at this point in time, the models that would suggest more soybean acres and USDA’s projections are at odds with one another. So, it will be interesting to watch the prospective planting report at the end of March to get an indication of what growers are actually going to plant.
Clements: Micheal Clements, Washington.
For more on crop prices, check out AFBF's Market Intel report.