Late last week, the USDA lowered the estimated farm-gate prices for crops, including corn. The projected price of corn is down $1.84 a bushel. This news, on top of last fall’s forecast of declining farm income should serve as a wake-up call to the ag sector.
“The farm economy is currently in a downward spiral with prices for agricultural commodities hovering at or below the cost of production in many areas. This decline is exacerbated by reduced exports, declining domestic market demand, and burgeoning excess supplies,” said Tom Buis, CEO of the American Carbon Alliance.
In September, the USDA projected net farm income to decline $41.7 billion or 22.8% year-over-year. Additionally, they said net cash farm income will be down by 26.5% and cash receipts are forecast to be down by 4.3%.
“Creating new markets, embracing SAF and carbon capture pipelines, while also promoting higher blends is the holistic approach needed to address the challenges faced by American farmers,” said Buis. “It is time to rally behind these initiatives to ensure the long-term sustainability and resilience of our agriculture sector.”
Former Congressman and Chair of the House Agriculture Committee Collin Peterson added, “We have witnessed this before, in the 80’s and 90’s, farmers had to count on government assistance to survive, then the ethanol industry took off and farmers received profitable prices from the market place. Now we again have excess production, and demand is not keeping up. Carbon Capture and sequestration creates new domestic demand for ethanol and corn and will result in higher prices for farmers, which is a good thing for rural communities as well. Without new demand we risk a continued decline in farm commodities.”
