Record crops predicted; farmers market carefully

  • by David Pitt Associated Press
  • Tuesday, August 12, 2014 1:55pm
  • Business

DES MOINES, Iowa — Farmers will produce a record-breaking corn harvest this year, surpassing earlier expectations of the U.S. Department of Agriculture, which on Tuesday revised upward its estimate of this year’s corn crop to 14 billion bushels to exceed last year’s 13.9 billion bushel record.

A bigger crop was expected as adequate rain and cool temperatures made for favorable growing conditions in the 18 states that produce 91 percent of the nation’s corn. The abundant harvest has driven prices lower, prompting farmers to take more control of their grain marketing by building more on-farm storage, holding onto the crop and timing the sale to maximize profit.

The USDA said the amount of corn produced from each acre will reach a new nationwide average of 167.4 bushels, up from the earlier spring estimate of 165.3 bushels. The record 164.7 bushels per acre average was set in 2009.

Iowa remains the nation’s top corn producer with an expected 2.44 billion bushels. Illinois is a close second with 2.22 billion bushels, followed by Nebraska with 1.51 billion and Minnesota with 1.34 billion.

Soybean production also will set a new record of 3.8 billion bushels, the USDA said, confirming its earlier prediction. The previous record was 3.4 billion bushels in 2009. Soybean production per acre also will break a record with a yield 45.4 bushels, beating the 2009 record of 44 bushels per acre.

Farmers have been forced to exercise more control over grain marketing by storing it until prices pushed lower by the large harvest improve.

“Either through permanent or temporary storage, you’re going to see huge quantities going into storage,” said Scott Irwin, a University of Illinois professor of agricultural and consumer economics. “Elevators will pile it onto the ground. Farmers may put it in these long plastic tubes out of South America.”

The tubes are temporary plastic bag storage systems that have become increasingly popular in the past few years after successful use in Argentina and Canada. The bags when filled can be the length of a football field and 8 to 10 feet in diameter. They can store grain for several months.

The storage increase is driven by low prices, problems with availability of rail cars to ship grain in the Midwest, and trucking bottlenecks that occur at elevators during harvest, said Craig Fisher, a Richardton, North Dakota, farmer who sells bags and bagging equipment.

“It’s fundamentally changed farming for me,” he said. “I can farm all I can handle now and not worry about bottlenecks. I can store it in the bags and worry about trucking it later.”

The construction of permanent grain bins also has increased. Farmers stored 11.78 billion bushels of grain on farms in 2012, according to the latest data available from the USDA. That was up 20 percent from 2002.

On-farm grain storage has become one way farmers take more control of their own grain marketing.

“By being able to store it, if a farmer can keep the grain off of a glut of supply, he may be able to sell it in December at a much better deal,” said Chip Nellinger, a futures market specialist at Blue Reef Agri-Marketing Inc., a risk management and agricultural product marketing firm in Morton, Illinois.

Corn for December delivery fell 14 percent during July. It was trading around $5 a bushel until it began a steep decline in early May.

It traded at $3.65 a bushel as Tuesday’s report was released.

Soybeans for November delivery were trading at $10.58 a bushel. They had been above $12 as recently as June.

The lower prices won’t immediately lower the cost of groceries, although they could help bring down prices of beef and pork since livestock producers will pay less for feed that contains corn and soybeans.

The lower prices have a significant impact on profitability for farmers since they’re harvesting a crop that cost them more to produce than they can immediately sell it for.

“It’s hard to sell $5 corn when you recently sold $6 corn. And it’s really hard to sell $4 corn,” said Chad Hart, an agriculture economist at Iowa State University.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.