By Allison Floyd

Farm profits in 2015 could be as low as they were in 2005, when corn sold for $2 a bushel, a panel of agricultural economists from Purdue University agreed on Friday.

“The Changing Business Climate for Agriculture: The Outlook for 2015” was led by Jim Mintert, the director of the Center for Commercial Agriculture and professor of agricultural economics. He was joined by fellow ag economists Chris Hurt, Michael Boehlje and Michael Langemeier, the associate director of the Center for Commercial Agriculture.

The drop in the price of corn and soybeans has slowed, but don’t expect prices to jump in 2015, the economists said.

“We are really just at that point of transition,” Mintert said. After a peak of nearly $7 in 2012-13, corn dropped for two years and will continue to fall next year, leaving margins as small as they were a decade ago.

“Most agribusiness managers recognize those were very tight margin times (10 years ago). I think that’s where we are headed. That’s our best estimate,” he said.

The boom times of 2012-2013 have passed, but the trend probably won’t turn around in 2015. That means if yields are smaller than in 2014 and prices are the same, margins will be even tighter.

Commodity prices fluctuate, but tend to have long troughs after boom times, said economist Mike Boehlje.

“The problem is, we build capacity when there’re good prices in this industry,” Boehlje said. “When there’re good prices, we bring land into production and we don’t pull it out of production when prices go down because there’s fixed costs.”

The economists agreed that corn will stay at or below $4 for a few years, while soybeans will be between $9 and $10.

At the same time, cotton supply is expected to be high, leaving Southern farmers without a clear planting choice. The U.S. Department of Agriculture expects there will be 5.2 million unsold bales stored at the end of July 2015, twice as much as this year. Chinese leaders have said they intend to draw down on existing stocks in that country, rather than buying more.

While row crop farmers will continue to see extra tight margins in 2015, livestock farmers are expected to have a very good year. The combination of dramatically lower feed prices and record high prices has produced exceptionally strong margins for most producers, Mintert said.

“The big questions for livestock and poultry producers are how long these positive trends will continue and what should producers do to solidify their financial position,” Mintert said.

To watch The Outlook for 2015, go to Purdue’s Center for Commercial Agriculture site.