Examining Factors Affecting Long Term Corn and Soybean Prices03/14/2016
The recent decline in farm prices has underscored a question that has existed throughout the recent period of higher prices, has a new era of farm prices emerged? An excellent argument for a new higher price era was laid out by Scott Irwin and Darrel Good in their March 29, 2011 farmdoc daily article. As is usual among economists, disagreement exists concerning a new era. This article joins the discussion by using market history to identify key factors that have helped shape current corn and soybean prices. Supply and demand features of world grain and oilseed markets since the early 1970s are reviewed. The role of input productivity, input prices, and inflation are examined. The article concludes with a discussion of what this review of history suggests are key indicators and questions as markets seek to resolve the questions of long term corn and soybean prices and thus whether a new era has emerged.