A federal report on the nation’s crops has farmers expecting record yields, but low crops prices are anticipated to take farm incomes down 25 percent or more.
National production and average yields per acre for corn and soybeans could set records, the U.S. Department of Agriculture’s National Agricultural Statistics Service reported Tuesday.
Hoosier farmers, too, are on track to break last year’s record 1.03 billion bushel harvest. The USDA expects this year’s production to reach 1.04 billion bushels of corn.
The state’s soybean crop could reach 279.9 million bushels, the third-largest in state history.
“The markets were expecting huge crops, and the report certainly supports that assessment,” said Jay Akridge, Glenn W. Sample Dean of the Purdue University College of Agriculture, in a release from the universitiy. “Overall good weather across the nation has provided just about ideal growing conditions.”
Locally, conditions have remained fairly healthy for corn crops, too. A Galveston-area farmer says southern Cass County hasn’t received quite as much rain as he’d like.
“I know that Logansport area [and] north has caught a lot of good rain,” said Kurt Wilson, who with his family farms several thousand acres in the county, mostly in the vicinity of Ind. 18.
“We haven’t gotten any true measurable rain” in that area, he said. “The corn’s showing a little stress, but it’s far enough along that it’s not hurting anything.”
While the total production signals a bounty of corn and soybeans — enough not only for livestock and ethanol producers, but also to eventually moderate increases in food prices — futures prices for both crops have dropped to their lowest levels since 2010.
Corn has fallen below $4 per bushel and soybeans are under $11. Prices that farmers will receive could fall so low that they would trigger payments to farmers under provisions in the new farm bill, according to Purdue.
“Prices are one of the things that isn’t so positive in this report,” said Chris Hurt, a Purdue Extension agricultural economist who participated in a panel discussion about the crops report. “The revenues will be down sharply this year.”
Hurt said crop farmers’ incomes could fall 25 percent to 30 percent.
That’s already affecting local agribusiness, Wilson noted.
“I think you’re already starting to see equipment dealers — their sales are slowing down,” Wilson said. Fertilizer sales, too, have dipped somewhat. “As prices go down, you’ve got to watch your inputs really well.”
He agreed that lower prices for corn could be a boon to both livestock farmers and the ethanol industry. “They’ve got a lot better margin so they can compete with the cost of gasoline a lot better,” Wilson said.
Indiana corn yields were projected to average 179 bushels per acre, compared with the previous record of 177 last year. Nationally, yields were forecast at a record 167.4, compared with 158.8 in 2013.
Hoosier soybeans were expected to yield 51 bushels per acre, the same as last year.
The projections were based on conditions as of Aug. 1. Final, estimated per-acre yields and total production are scheduled to be reported in January.