A big question in 2022, then, is whether crop prices will stay ahead of rising input costs. Presently, prices for Nebraska produced commodities like corn, soybeans, and wheat are higher than they were a year ago and provide the opportunity for modest returns. On the supply side, dry weather in parts of Brazil and Argentina and the tense situation between Ukraine and Russia are worth watching as these can affect global supplies. Longer term the market is watching how farmers will respond to higher fertilizer costs and whether acreage will shift from corn to soybeans. Presently corn remains competitive with soybeans even with the higher fertilizer prices.
Crop demand looks fairly decent in 2022. Exports of both corn and soybeans are expected to be less in 2022 relative to 2021 but should remain at historically high levels. Corn for use in ethanol production is projected to be higher due to growing fuel consumption and strong margins in ethanol production, currently running above $1.00/gallon. Greater demand for renewable diesel should mean increased demand for soybean oil and continued investment in soybean crushing capacity. Wheat exports are expected to be lower due to tighter supplies.