Corn, soybean profits tight for 2020: FCC

Profitability for grain farmers is expected to be tight this year, according to the latest report from Farm Credit Canada. Corn and soybean prices are expected to slip below the 2019 average but, for corn at least, to stay above the five-year average. Corn was forecast at $196/tonne, down $14/tonne from 2019 but slightly above the $190/tonne average from the last five years. Soybeans were projected to hit $428/tonne; just shy of the $431/tonne average last year but well below the five-year average of $470/tonne.

Corn-fed ethanol plants saw a huge decrease in production. Corn prices follows oil and prices began rising in mid-April. According to the Associated Press, by April 23, 60 of 204 ethanol plants in the U.S. had closed and overall production had fallen by about half.

Wheat was one of the few bright spots. Spring wheat was expected to hit $242/tonne, up from $230 last year and a five-year average of $221/tonne.

There was some good news for farmers: Input prices were expected to be down, and diesel prices had slipped by about 20 per cent year-over-year in March, with FCC expecting that to drop even further into May. But overall weak global demand (and domestic, with low oil prices pushing ethanol plants to slow down), large global supply and lower feed demand all add up to bad news.