Schnitkey says the decline in prices for this year and next should be anticipated because economists thought the prices of the past several years were above what they should have been. Consequently, the $4.60 corn and $10.60 soybean prices seem reasonable for the long term trend. The bottom line is that the lower returns will require that farmers make financial adjustments in their operations. That may mean capital purchases are delayed or reduced overall and that cash rents will have to be reduced to reflect the lower commodity prices and expected returns for the next couple years.
A combination of higher input prices and other non-land costs for this year and next, compared to the past several years, along with lower average prices for commodities than the period of 2010 through 2012 will all combine to mean lower returns to operators and farmland. The result will be the need to reduce capital expenditures and negotiate lower cash rents to be able to maintain any degree of profitability.
Source: FarmGate blog