Record corn prices. Record farm incomes. Record equipment sales. Drought or no drought, the last few years reaped an unprecedented bounty for America's farm economy.
"These last two years have been my best," said Dave Steward, who's been farming corn and soybeans for 40 years outside Decatur, Ill.
But what goes up usually comes down, and that may be happening with farming. The price of corn has fallen 40 percent from its record high of $8 a bushel last fall, though prices were rising again this week as a withering heat wave hit parts of the corn belt. However, if corn stays below $5 a bushel, many analysts say, farmers will slow their spending, becoming more cautious. Lower-priced corn creates less need to make big purchases that can be written off against taxes.
"I think we will see $4 corn before we see $7 corn again," said Ann Duignan of JPMorgan. She has an underperform rating on Deere, as she expects equipment purchases in the U.S. to "take a breather."