USDA report pressures prices down, pegs corn and beans outputs lower, too

Farm Forum

South Dakota farmers will harvest less corn and soybeans this year, while nationwide farmers will reap record amounts of the crops, breaking last year’s record outputs, the U.S. Department of Agriculture reported on Aug. 12.

The news pressured prices lower but they recovered as analysts questioned the figures and cited long-term rising world demand for the crops.

The report wasn’t great news for South Dakota farmers as it promised little hope of prices rising from relatively low levels while also forecasting fewer bushels in bins. A year ago, record yields for the state’s farmers in several crops helped offset the negative impact of low prices.

Farmers in the state say this year began well, with an early spring. But drought conditions have hit corn and soybeans hard in some areas and while other locales have had timely rains, few expect any kind of bumper crop.

A lot can still happen to the crops before harvest this fall, most of it negative at this point of maturity.

It’s bad for American agriculture as a whole, said Chip Bowling, president of the National Corn Growers Association, in a statement putting it into the presidential politics arena.

USDA’s reports on on Aug. 12 “should be a wake-up call for both Presidential campaigns regarding the economic challenges facing farmers and rural America,” Bowling said. “Rural America needs help. With prices for a number of crops and livestock commodities already below the cost of production, the potential losses in rural America will result in fewer family farms, fewer jobs and economic hardship. We need real solutions that help us access markets, expand biofuel use and ensure a more sustainable future.”

The U.S. Department of Agriculture pegged the state’s corn crop, still two months and more from harvest, at 779 million bushels, down 3 percent from last year’s crop. USDA said 5.3 million acres of corn will be harvested for grain in the state, up 5 percent last year, while the average yield will be 147 bushels per acre, down 12 bushels from last year’s record yield.

South Dakota farmers will harvest 205 million bushels of soybeans, down 13 percent from last year’s record harvest, USDA said while pegging harvested acres at 4.87 million, down 5 percent from the record in 2015. Per-acre yields will average 42 bushels in South Dakota, down 4 bushels from last year’s record yields.

But nationwide, farmers will reap record amounts of corn and soybeans: 15.2 billion bushels, 11 percent more than last year; average yields will hit a record 175.1 bushels per acre, up 6.7 bushels from last year.

The crop will come from 86.6 million acres harvested for grain, same as the June forecast and up 7 percent from 2015.

U.S. soybean production was forecast at a record 4.06 billion bushels, up 3 percent from last year, from a record yield of 48.9 bushels per acre.

Corn futures prices fell to the lowest levels in several years before rallying to end the day slightly higher. Soybean futures prices fell slightly, too.

Market analysts say long-term demand for grain remains near record levels, off-setting the negative price effects of record U.S. production.

Analysts also said skepticism over USDA’s bigger-than-expected crop production forecasts mitigated the negative price effect.

USDA also put all wheat output up, at 2.32 billion bushels nationwide, 3 percent over its July forecast and 13 percent higher than the 2015 crop, with yields pegged at an average of 52.6 bushels per acre, up 1.3 bushels from the July estimates and 9 bushels higher than last year’s yields.

Winter wheat output will be 1.66 billion bushels, up 2 percent from the July 1 forecast and up 21 percent from 2015, with yields averaging 54.9 bushels per acre, up 12.4 bushels from last year, of 30.2 million acres, down 6 percent from 2015.

Hard red spring wheat production nationwide was pegged at 531 million bushels, up 4 percent from the July forecast but down 6 percent from 2015.

South Dakota’s winter wheat, pretty much all harvested, will total 57.8 million bushels up 35 percent from last year’s crop that was bedeviled by a tough winter and spring. Yields will average 54 bushels an acre, up a full 10 bushels from last year, on 1.07 million acres harvest, a 10 percent increase from 2015. Planting for next year’s winter wheat crop will begin within a month, farmers say.

Spring wheat production in the state was forecast by USDA at 46.6 million bushels, down 23 percent from 2015, on 950,000 acres harvested, only three fourths the footprint of last year’s crop. Yields will be up a bushel per acre to average 49.

South Dakota’s sorghum crop will total 14.6 million bushels, down 20 percent from last year, yielding 79 bushels an acre, down 4 from last year. Harvest acres will total 185,000, down 16 percent from 2015.

Alfalfa hay production will total 3.8 million tons, down 9 percent from 2015, off 1.9 million acres, same as last year. Yields will average 2 tons per acre, down 0.2 tons from last year.