In April, Robert (Bob) Maltsbarger, a senior research economist with the Food & Ag Policy Research Institute at the University of Missouri, partnered with Farm Credit East and took some time to explain the predictions and trends for the 2024 grain and oilseed business in the U.S.

Maltsbarger focused his time on the following four subjects: corn, soybean, wheat and livestock.

In order to predict how the grain and oilseed business will change in 2024, we must look at the overall world population – the more people we have on this planet, the more food needs to be grown to support them.

In general, the world’s growth rate is still positive, but the increase is much slower than it used to be. The U.S. alone used to have a 1% population growth rate in 2007; it’s now a little under 0.5%.

Besides population growth, we have to keep in mind the average economic growth rates, inflation rates and interest. Maltsbarger took his data from S&P Global, where they predicted the average economic growth rates from 2024-2033. Overall, “the average that [S&P Global] had for the whole world was about 2.6% per year, and the U.S. was 1.5% per year.”

When it comes to inflation, although the U.S. experienced a large spike of 8% in 2022, the rate has been decreasing since.

Corn Outlook

Corn in general is in very high demand, and “we see domestic demand being relatively stable going forward,” Maltsbarger said. He expects to see normal trend yields in the new marketing year, assuming that we have average weather (which we have not had in the past few years).

In terms of exports, Brazil is expected to have a large corn crop overall, but not nearly as large as it was last year. Argentina is expected to have better corn yields due to their improvement from the drought last year. Ukraine has been limited on their corn production due to the war.

In the past few years, the number of cattle in the U.S. has been declining, so we are expecting to export more corn than we usually do. There are actually a lot more corn importers than there are major exporters. The main three importers Maltsbarger mentioned were China, the EU and Mexico.

In 2022, the U.S. had record net farm income, Maltsbarger said, largely driven by the cash returns of crops. Recently, “those net returns decreased faster in corn than they did for soybeans, which means for the spring … there is more incentive for farmers to plant soybeans” instead of corn.

Back on April 5, the soybean-to-corn futures price ratio was at 2.5. This doesn’t necessarily mean there will be more soybean acreage than corn acreage, just that the soybean acreage will increase in comparison to last year and the corn acreage will decrease.

In 2023, the U.S. ended up with record corn production – around 15.3 billion bushels. Because less acreage is expected to be planted for corn this year in comparison to last, “we see production is going to be near but less than 15 billion bushels in the next year,” Maltsbarger said.

Corn, wheat & oilseed predictions for 2024

Soybean Outlook

There is an increasing desire to use soybean oil for renewable diesel and sustainable aviation fuel. With this growth of biomass-based diesel, there will most likely be a decrease of conventional biodiesel in the future. Using soybean oil for this bio-based diesel is going to affect how much soybean must be produced in a given year.

From April to June 2020, the value of soybean oil increased dramatically, and although slowed down, it continued to rise into 2022.

Overall, the soybean oil crush margin increased throughout 2023. Since there is incentive to crush more soybeans for oil to use for the bio-based diesel, it’s important to recognize that only about 20% of the soybean is oil. The other 80% would be used to produce soybean meal. If we continue to crush more soybeans for oil, the price for soybean meal is bound to decrease along with it.

The top three soybean exporters in the world are Brazil (who “took over as the leading exporter of soybeans in the world around 2011-2012 and they’ve continued holding that status ever since”), Argentina and the U.S. Soybean imports are dominated by China, who “consumes at least 60% of the world’s exports in any given year of soybeans,” reported Maltsbarger.

Considering the acreage dedicated to soybeans is expected to increase in 2024, it’s predicted to have “production increasing over 4.5 billion bushels, which would be a new record.” With increased acreage and increased production, “prices will continue to be softer than what we saw in the last two marketing years.”

Wheat Outlook

There were not a lot of updates in terms of wheat production in the future, as “we don’t have a lot of changes for domestic demand,” Maltsbarger said.

There continues to be a decrease of wheat use in the American diet. There is a large competition for exports, meaning there’s an abundance of wheat being produced globally. Overall, “the world is not looking for [the U.S.] for most of their wheat needs” and therefore there’s not a big desire to use land for growing wheat in the U.S.

Livestock Outlook

Maltsbarger mentioned livestock during this grain and oilseed discussion to see if the dairy and beef industry can stay ahead of the costs in 2024. In summary, “cattle prices are high, feed prices are coming off but non-feed prices remain elevated.”

The number of beef cattle in the U.S. continues to decline. Based on statistics from January 2024, this is the lowest herd of beef cattle America has had in 61 years, down 2.3% from January 2023. With fewer beeves, there will be less meat produced in the U.S.

It’s important to remember “we still have profitability for beef cows right now,” Maltsbarger said. “The challenge is they’re expensive and there’s an incentive to sell.”

Looking at dairy cattle, dairy prices averaged above $20/cwt. last year. Although “little change is expected for milk prices in the next couple of years, declining feed expenses will allow finances to improve for many operations.”

At the beginning of 2024, the number of dairy cattle in the U.S. was at the “third lowest level that they have been since the spring of 2016,” Maltsbarger said.

American net farm income is projected to be “tighter than it was the last two years for 2024.”

Throughout his presentation, Maltsbarger focused on three main takeaways:

• The cost of growing crops will continue to increase

• The price of selling/buying crops will continue to decrease

• If you have cattle, there’s an incentive to continue to sell

“What that means for the farmers is margins are narrowing this year … and you want to be strategic with your marketing for this fall’s crop,” he said.

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by Kelsi Devolve