Rain makes grain, and two mid-August U.S. Department of Agriculture reports offered the first in-field look at how much corn, soybeans and wheat American farmers will grow in this wet, grain-making year.
On Aug. 12, USDA estimated that the U.S. corn crop would total 15.1 billion bushels, a small decline from a year ago but still the third-largest crop ever. A record per-acre national yield, pegged at 183.1 bu., is almost six more per acre than in 2023.
High production usually means low prices and USDA estimates the 2024-25 corn crop’s average price will slump to $4.20 per bu., 45 cents lower than the current crop year and a wallet-thumping $2.34 under 2022-23’s average of $6.54.
Read Also
Farming still has digital walls to scale
Canadian farms still face the same obstacles to adopting digital agriculture technology, despite the years industry and policy makers have had to break them down.
Bigger production also means bigger ending stocks, but falling prices can trim the rising stockpile if they spur new buying. USDA does not see that happening in the coming year. Worse, ethanol makers will use the same amount of corn this year as last, 5.45 billion bu., while U.S. exports are expected to climb an almost imperceptible 50 million bu.
That means ending corn stocks a year from now will be 2.07 billion bu., or 10 per cent more than today. That’s a tough hill for weakened prices to climb.
The coming soybean crop, according to USDA bean counters, will be a whopper: Total 2024-25 U.S. soy production will set an all-time record, 4.6 billion bu., or 10 per cent over a year ago. Estimated national yield per acre will also be a whopper: 53.2 bu.
But the staggering crop will bring a price-busting carryover of 560 million bu., or almost 220 million bu. more than this marketing year, and a projected $10.80 per bu. average price, $1.70 under the current year’s average and a jarring $3.40 per bu. less than two years ago.
A key part of that price drop hinges on continued increases in global oilseed production, notes USDA. Worldwide, soy and rapeseed production will increase an estimated 4.5 million tonnes, mostly due to acreage increases in Russia, Ukraine, India, and West Africa’s ag-dominated Benin.
U.S. wheat producers face the same hill as corn and soybeans, despite fewer 2024 planted acres. Better yields, however, kicked production to two billion bu., or about 170 million bu. over a year ago.
That boost, as well as growing global competition, means U.S.wheat stocks will again build as prices continue to slip throughout the coming year. For 2024-25, the USDA sees all U.S. wheat prices averaging $5.70 per bu., or about $1.25 less per bu. than a year ago.
What this year’s wet weather can’t grow, however, is more income. In February, USDA projected 2024 U.S. net farm income at $116 billion, or 25 per cent below 2023’s take. These August production and usage estimates strongly point to that number draining even lower when USDA revises its farm income estimate Sept. 5.
It proves, once again, that when it rains, it pours.
