(Washington, D.C) Justin Benavidez, USDA Chief Economist, appearing on Farm Broadcasters’ Washington Watch on Tuesday, says over the past 15 years, people have talked about a cycle of profitability and loss. He says that over the last 15 years of farm economics, there has been a sustained divergence between input costs and returns to output, with brief periods of profitability.
Benevidez says row crop farmers are currently facing a long-term headwind, and we need to get to a point where new sources of demand and innovative sales for the product in farm country are in place.
Benevidez explains that the country is currently dealing with heavy grain stockpiles that have been weighing on the market for about two years since Russia’s invasion of Ukraine. He notes that as long as there are no major transportation disruptions or significant weather problems in key breadbasket regions, these large supplies are likely to persist until a new source of demand emerges. While gradual factors like increased protein consumption—which drives higher feed use—could help, Benevidez believes it is realistic to expect current grain prices to continue for at least one to two more years.
