On Friday, USDA’s National Agricultural Statistics Service (NASS) released its Crop Production report, which indicated that, “Corn production is forecast at 14.5 billion bushels, up less than 1 percent from the previous forecast and up 4 percent from 2013. Based on conditions as of October 1, yields are expected to average 174.2 bushels per acre, up 2.5 bushels from the September forecast and 15.4 bushels above the 2013 average. If realized, this will be the highest yield and production on record for the United States [related graph].”
The NASS report added that, “Soybean production is forecast at a record 3.93 billion bushels, up slightly from September and up 17 percent from last year [related graph]. Based on October 1 conditions, yields are expected to average a record high 47.1 bushels per acre, up 0.5 bushel from last month and up 3.1 bushels from last year.”
The WASDE report included this overview table of corn supply and demand variables, and stated that, “Corn ending stocks are raised 79 million bushels to 2,081 million. The projected range for the season-average farm price is lowered 10 cents on each end to $3.10 to $3.70 per bushel.”
Likewise, Friday’s WAOB report included this overview table of soybean variables, and explained that, “U.S. soybean exports and crush for 2014/15 are unchanged this month. Soybean ending stocks are projected at 450 million bushels, down 25 million on reduced supplies. Prices for soybeans, soybean oil, and soybean meal are unchanged.”
With respect to wheat, Friday’s WASDE update added that, “The projected range for the 2014/15 season-average farm price is narrowed 5 cents on both the high and low end to $5.55 to $6.25 per bushel.”
“The Food and Agriculture Organisation’s (FAO) price index, which measures monthly price changes for a basket of cereals, oilseeds, dairy, meat and sugar, averaged 191.5 points in September, down 5.2 points or 2.6 percent from August.
“The figure was 12.2 points or 6.0 percent below September 2013 [related graph].”
Marcia Zarley Taylor reported yesterday at DTN that, “The ghost of the Southwest’s mega-drought continues to haunt growers even after a few rain showers this last growing season. Producers there have been used to paying dearly for each dollar of crop insurance coverage, but the cost-benefit ratio could reach a breaking point in 2015.
“‘Under old farm policies, lenders would look at your portfolio and see how much crop insurance guaranteed in gross revenue, than add in direct payments and that was the basis for your crop loans,’ said Matt Huie, a 38-year-old crop producer from Beesville near the Gulf Coast rim of Texas. ‘Now we’ve seen our basis for loans erode because of drought and erosion in commodity prices.’
“Texas state climatologist John Nielsen-Gammon describes prolonged drought in the Corpus Christi area as one of the two most severe in the region’s recorded history. Only the epic drought of the 1950s to the early 1960s matches it.”
Michael R. Crittenden reported in today’s Wall Street Journal that, “Lawmakers returning to Capitol Hill on Monday hope to quickly deal with a government funding measure and several other must-address items before decamping to the campaign trail ahead of November’s midterm elections.
“After a five-week summer break, legislators have given themselves a tight window to pass a stopgap measure to keep the government running beyond Sept. 30, as well as decide how to handle other-deadline driven issues such as the U.S. Export-Import Bank and a long-standing moratorium on Internet access taxes.”
Jacob Bunge reported yesterday at The Wall Street Journal Online that, “U.S. grain and soybean futures closed sharply lower Wednesday—with corn sinking to the lowest level in more than four years—after government and private-sector reports reinforced expectations for massive harvests ahead.
“Corn futures for September delivery fell 4.1%, the biggest decline on a percentage basis since June 30, pressured by reports from Allendale Inc. and Lanworth estimating high yields that may translate to larger U.S. grain stockpiles, analysts said.
“September corn dropped 14½ cents to $3.41¼ a bushel on the Chicago Board of Trade, marking the lowest closing price since June 29, 2010. December corn futures, the most-active contract by volume, dropped 11¾ cents, or 3.2%, to $3.52 a bushel.”
Mr. Bunge added that, “Soybean and wheat futures also declined Wednesday as crop-yield forecasts soothed concerns over weather-related threats to some U.S. soybean fields, and a strengthening U.S. dollar added uncertainty to export prospects for the domestic wheat crop.”
Tom Meersman reported over the weekend at the Minneapolis Star-Tribune Online that, “The prospect of a bin-busting crop has driven corn prices to their lowest levels in four years and raised fears of a prolonged slump for crop farmers in Minnesota and elsewhere.
“After three years of profits, analysts are calling 2014 a break-even year, at best. Some think prices could drop more and stay low into 2015.”
“The Market Protection Program is an insurance option for dairy farmers that is being run through the Farm Service Agency. The Margin Protection Program will pay indemnities to farmers when the difference between the price of milk and feed costs falls below a coverage level selected by the farmer.
“Enrollment begins Tuesday and will run until Nov. 28 for the 2014 and 2015 calendar years.”
Jesse Newman reported in today’s Wall Street Journal that, “Two visitors on an annual Midwest crop tour here [McLean County, Il] this week quickly found themselves enveloped by 10-foot-high stalks of corn, an up-close view of what some think could be an even-larger U.S. crop than the record harvest projected by federal forecasters.”
The article noted that, “So far, estimates of corn yields from states on the closely watched Pro Farmer tour mostly have exceededU.S. Agriculture Department estimates [graph], adding further pressure to corn prices that have dropped 15% this year and are trading near four-year lows [graph]. Tour findings also indicate that much of the nation’s soybean crop, also expected to reach a record this year, is in good health as it undergoes its main growth stage.
“Corn futures for September delivery, the front-month contract, fell three cents, or 0.8%, to $3.595 a bushel Wednesday on the Chicago Board of Trade. Prices are off 1.7% so far this week.”
Jesse Newman reported yesterday at The Wall Street Journal Online that, “The corn crop in Ohio, the nation’s seventh largest producer of the grain, will surpass projections made in the most recent federal estimates, according to an average of survey results collected by crop scouts on a closely watched crop tour.
“Corn yield potential across five regions of Ohio was estimated Monday at 182.11 bushels per acre, well above the state’s three-year average of 146.13, and greater than the U. S. Department of Agriculture’s Aug. 1 forecast for the state, which pegged yields at 177.0 bushels per acre.
“The new estimate is 3% higher than last year’s state record of 177.0 bushels per acre, reported by the USDA.”
Ms. Newman added that, “South Dakota’s three averaged regions are expected to yield an average 152.71 bushels per acre, almost 10% higher than the USDA’s prediction of 139.0 bushels made earlier this month.”
Purdue University agricultural economist Chris Hurt indicated yesterday at the farmdoc daily blog (“Where Will Beef Cows Expand?”) that, “It is getting to be a well repeated story. Beef cow numbers are at their lowest level since 1962. Cattle and feeder cattle prices are at record highs and feed prices have dropped. Beef consumers continue to eat beef and are rewarding the beef industry with very profitable returns. So when are beef producers going to expand the breeding herd and in what regions of the country will that occur?
“To answer those questions we first look at the areas of the country that had the biggest reductions in beef cow numbers due to drought, high feed prices, and financial losses. Since 2007, beef cow numbers dropped by 12 percent totaling 3.8 million head. The biggest declines were in the region with the most cows-the Southern Plains- which accounted for 1.6 million of the decline. Texas, the big beef cow state, had a reduction of 1.4 million head, an astonishing 36 percent of the nation’s total decline. That region’s expansion opportunities are very mixed due to lingering drought. About one-third of Texas remains in the three highest drought categories, D2-D4. Importantly, parts of cow-dense eastern Texas are now out of drought and the National Weather Service is forecasting some continued drought abatement by this fall for the region. In conclusion, lingering drought in the Southern Plains will tend to mean a slow expansion there.
“The second most important region for beef cows is the Southeast, which had an 822,000 head beef cow reduction since 2007, or 21 percent of the nation’s total. The biggest reductions were in Tennessee and Kentucky and accounted for 59 percent of the region’s decline. The Southeast is generally in good shape for pastures as the impacts of the 2012 drought have passed.”
A news release on Friday from USDA’s National Agricultural Statistics Service (NASS) indicated that, “U.S. farmers spent $367.3 billion on agricultural production in 2013, a 2.0 percent increase from 2012, according to the Farm Production Expenditures report, published today by [NASS].
“Per farm, the average expenditures total $175,270 compared with $171,309 in 2012, up 2.3 percent [related graph]. Crop farms account for the majority of production expenditures in 2013. The average expenditure per crop farm totals $211,659 compared to $143,521 per livestock farm.”
Donnelle Eller reported on Friday at The Des Moines Register Online that, “The cost to farm last year climbed, with Iowa growers spending nearly $30 billion on expenses such as rents, feed, livestock and fuel, the U.S. Department of Agriculture said today.
“It was a 3 percent increase, or $835 million more than 2012, the federal government data showed.
“U.S. farmers spent $7.2 billion more last year, with expenses rising 2 percent to $367.3 billion.”
Joseph Serna reported yesterday at the Los Angeles Times Online that, “More than half of California is now under the most severe level of drought for the first time since the federal government began issuing regular drought reports in the late 1990s, according to new data released Thursday.
“According to the U.S. Drought Monitor report, in July roughly 58% of California was considered to be experiencing an ‘exceptional’ drought — the harshest on a five-level scale.
“This is the first year that any part of California has seen that level of drought, let alone more than half of it, said Mark Svoboda, a climatologist with the National Drought Mitigation Center, which issued the report.”
Gregory Meyer reported yesterday at The Financial Times Online that, “The prospect of a colossal 1bn-tonne global corn crop has sent the price of the grain below $4 per bushel for the first time in almost four years.
“Reports of near-perfect conditions in the US corn belt and favourable weather from Ukraine to China have pounded bulls in agricultural markets in recent weeks. Farmers’ incomes, tractor sales and land prices could be hit.
“Analysts expect the US Department of Agriculture to raise its forecast of how much corn the average US farmer will harvest per acre when it updates official estimates on Friday. The agency’s current estimate, of 165.3 bushels per acre, would already be a record.”
Tim Devaney reported yesterday at The Hill Online that, “House Republicans clashed with Environmental Protection Agency (EPA) officials Wednesday over the agency’s controversial plan to regulate small bodies of water, which the GOP says could hurt American farmers.
“Republicans fear the EPA’s proposed Waters of the U.S. rule would expand the agency’s authority to include small rivers, streams and ponds around the country, which they say could hurt farmers whose lands are strategically surrounded by water.
Daniel Finney reported on the front page of yesterday’s Des Moines Register that, “Punishing thunderstorms, tornadoes and hail assaulted Iowa for a second straight day Monday, killing at least one man and leaving a teenager missing, flooding streets, destroying property and battering weather-weary residents.”
The article noted that, “There were reports Tuesday of over 5 inches of rain falling on Monday alone.”
More specifically, Mr. Finney indicated that, “Hail and wind flattened corn crops and battered homes and buildings across the state [see photos here and here].
“Hail as large 4 inches in diameter — slightly larger than a softball — crashed to the ground in Rockwell City in Calhoun County.
“Six inches of rain clobbered Cedar Rapids from 10 p.m. Sunday through about noon Monday. Cedar Rapids rescuers evacuated some areas by boat.
“Another 5.6 inches of rain drenched Center Junction in Jones County in about 12 hours from late Sunday through Monday morning.”
Nonetheless, the Register article indicated that, “The crops that weren’t destroyed by storms could help return corn yields back to normal, [Elwynn Taylor, Iowa State University climatologist] said.”
A news release yesterday from USDA’s National Agricultural Statistics Service (NASS) stated that, “[NASS] estimated a record high 84.8 million acres of soybeans planted in the United States for 2014, up 11 percent from last year, according to the Acreage report released today. Corn acres planted is estimated at 91.6 million acres, down 4 percent from last year, representing the lowest planted acreage in the United States since 2010.”
“All cotton planted area for 2014 is estimated at 11.4 million acres, 9 percent above last year,” the NASS update added.
The update noted that, “NASS today also released the quarterly Grain Stocks report to provide estimates of on-farm and off-farm stocks as of June 1. Key findings in that report include:
“Soybeans stored totaled 405 million bushels, down 7 percent from June 1, 2013. On-farm soybean stocks were down 36 percent from a year ago, while off-farm stocks were up 12 percent.
“Corn stocks totaled 3.85 billion bushels, up 39 percent from the same time last year. On-farm corn stocks were up 48 percent from a year ago, and off-farm stocks were up 32 percent.”