By Mike Boehlje and Chris Hurt

Agriculture has been on a roll in recent years.  Record high grain prices stimulated record high incomes and surging land values increased wealth.  Crop producers overall were doing well as the prices of their crops outpaced rising input costs.  Agribusinesses that provided cropping inputs have generally benefited as well.  But the current financial crisis has been a hard and swift change for crop farmers.  In just 14 trading days between September 26 and October 16, futures prices for corn lost 30%, soybeans 26%, and wheat 23%.  Ethanol prices-a critical market for corn-fell by 24% during that period. 

To read the entire article Assessing the Financial Crisis and its Impact on Agriculture click here.

Issued by Darrel Good, Extension Economist, University of Illinois

Corn and soybean prices have been pummeled by negative fundamental news since early September.  In late June, we were asking if the highs were near, now the question is whether the lows are near.

The latest round of negative information was provided by the USDA's October Crop Production report.  For soybeans, that report contained a 2008 production forecast of 2.983 billion bushels, 49 million larger than the September forecast and 63 million larger than the average pre-report guess.  In spite of a 3 bushel   increase in the forecast of the Illinois average yield, the forecast of the U.S. average yield, at 39.5 bushels, was 0.5 bushels below the September forecast.