Grain prices may drop after several years of increase - Media.

In October, corn prices dropped significantly to around $4.20 per bushel, and soybean prices also decreased to about $10. They are significantly lower than the peak recorded in 2022 and 10% below the projected prices by the USDA earlier this year, reports 24 Channel.

This sharp drop in value may lead to financial problems and force farmers to look for ways to sell the anticipated disastrous 2024 harvest.

The reduction in income also negatively affects farmers' sentiments. In September, their sentiments fell to levels not seen since 2015-2016, when farming in the U.S. became increasingly difficult. Over the past few years, many farmers preserved a lot of cash due to high grain prices. But now that amount is shrinking, making risk management tools and creating thoughtful marketing and financial plans extremely important.

'I think we need to realize that a corn price of $4 will not be a long-lasting phenomenon, so forget about your past plans and move forward,' emphasizes Professor Gary Schnitkey from the University of Illinois.

Experts predict that apart from the anticipated increase in harvest, farmers also have grain stocks. The chief economist of the grains and oilseeds department, Tanner Emke, believes that after several years of high prices, farmers have lost their marketing discipline.

'When the price comes to you without much effort, you aren’t actively marketing. Now the situation is changing,' he says.

A decrease in prices will lead to reduced profits and incomes for farmers. It is expected that costs will also decrease, but not immediately. According to Schnitkey, from 2014 to 2020, incomes fell significantly, and in 2015, grain farms in Illinois almost completely lost their net income. Fertilizer and fuel costs decreased, but seed and pesticide costs remained stable. Rent fees gradually decreased in accordance with reduced income.