The U.S. corn crop is projected to reach record production this year but won't be quite as large as initially expected because heavy spring rain in parts of the country prevented some acres from being planted, according to the U.S. Department of Agriculture's Nov. 8 crop production report.
Indiana's corn crop also is expected to set a record.
The report gave farmers and commodities traders their first glimpse at U.S. crop production since September because the partial federal government shutdown canceled the October report.
The USDA's National Agricultural Statistics Service is projecting that corn production will reach 14 billion bushels, up nearly 1 billion bushels from the record set in 2007.
While a record, Purdue Extension agricultural economist Chris Hurt said production won't be as high as some expected, which is good news for farmers.
“There was a lot of fear coming into this report that the corn crop would be so large that prices would be extremely low,” he said. “But while yields were up substantially, prevented planting acres offset some of that.”
USDA Lowered harvested corn acres by nearly 1.9 million and soybean acres by about 700,000, primarily because of land that did not get planted due to excessive spring rains.
Another positive result for farmers is that USDA recognized the growing demand for the nation's corn and soybean crops from both export buyers, such as China, and domestic buyers, such as livestock producers.
“A lot of people are breathing a sigh of relief that the crop is not larger and that there's a growing demand base for the crops produced,” Hurt said. “This report might provide a bottom for prices.”
The USDA currently is estimating the national average farm-level corn price for the 2013 crop will be $4.50 per bushel, compared with $6.89 per bushel for the 2012 crop.
USDA projected national soybean production to reach 3.26 billion bushels, which would represent the third-largest crop on record.
The national average price received for 2013 soybeans is estimated to be $12.15, compared with $14.40 for the 2012 crop. According to Hurt, soybeans could offer some income stabilization for crop farmers.
“We haven't seen the same erosion in soybean prices that we have in corn because of the strong demand from China and tight world supplies until the South American crop comes into the markets later this winter,” he said. “Soybeans could be a stabilizing influence in farm incomes.
“It's never just about the size of the crop but what buyers you have and at what price they will pay for it.”
The overall large corn and soybean crops will be welcome news to end users, such as processors and livestock producers, and ultimately food and fuel consumers.
With grain more readily available and at lower prices, food price inflation should fall below the general rate of inflation. For the last two years, food price inflation has been higher than general inflation.
Indiana farmers are following the national trend with projected record corn production at more than 1 billion bushels for the first time. At 174 bushels per acre, the state’s farmers also are expected to break the record for yield. The record of 171 bushels per acre was set in 2009. This compares with a national per-acre corn-yield average of 160.4 bushels, which Hurt said would be a fairly normal yield.
The state's soybean farmers are expected to produce an estimated 2.6 million bushels on yields of 50 bushels per acre. That would tie per-acre yields from 2006 and fall just short of the record 51.5 bushels per acre in 2004. These yields compare with 43 bushels per acre nationally, which Hurt said also is close to normal expectations.