Bountiful Harvest of Corn, Soybeans Not Good News for Ohio Farmers

December 14th, 2017

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Category: Grains

(The Columbus Dispatch) –  No one expected it, or wanted it, but U.S. farmers have another bumper crop of corn and soybeans. The bounty isn’t good news, driving prices paid to producers lower.

Ohio farmers, like many of the country’s other growers, planted less corn this year and had a heck of a time getting it in the ground in the spring due to rain.

It turned out that a nice summer mitigated both of those factors, with combines finding a lot of corn come harvest.

Although Ohio’s yield of 173 bushels an acre doesn’t break a record, it is just the fourth time that the state’s yield has topped 170, and it represents a jump from last year’s 159.

The nation’s corn harvest will be the second-largest ever, and the national yield will reach 175 bushels an acre, a record, according to the U.S. Department of Agriculture.

Soybeans had a mixed year. In Ohio, the yield was off — 51 bushels an acre compared with 54.5 last year — but it beat the national figure. U.S. production set another record as farmers planted more soybean acres than ever.

None of this bodes well for markets.

“Everyone has been pleasantly surprised about yields,” said Allen Geyer, a research associate with Ohio State University Extension. “Price-wise, that’s a whole different story.”

Average selling prices for corn this fall were $3.50 a bushel, Geyer noted, compared with $3.66 a bushel last year. With another bumper crop, prices might continue to sit below the cost of production. The fact is, U.S. farmers — and many of their counterparts around the world — have substantially exceeded the demand for corn.

“We ended up with surprisingly high yields,” said Matt Roberts, principal of Kernmantle Group and an independent agricultural economist. “There is just so much production out there and a whole lot of stuff left over from last year.”

The growing season started slowly, with a lot of rain forcing farmers to replant a significant chunk of corn acres — sometimes more than once. Yet, a decent summer — not too hot, not too dry or wet — plumped up the crops. Going into 2018, farmers won’t see much profit on the horizon.

“The only way we see (prices rise) in 2018 is if there is a significant interruption,” Roberts said, “a big shortfall somewhere.”

Although soybean production is at an all-time high, the crop still has an edge on corn when it comes to profitability, thanks to growing demand in China. The nation’s tilt of acres away from corn and toward soybeans — corn nearly gave up its No. 1 spot this year — will continue as farmers hunt for ways to get back into the black.

“Soybean demand is growing so much faster than corn,” Roberts said. “I think we will see corn acres decline, and that shift will be to soybeans.”

 

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