The federal government expects Indiana and the nation to grow bumper crops of corn and soybeans for the second consecutive year, adding to already adequate supplies but further holding down prices farmers will get for their productivity.
Both total production and average yields per acre nationally for corn and soybeans could set records, the U.S. Department of Agriculture's National Agricultural Statistics Service reported Tuesday (Aug. 12).
Indiana farmers are on track to harvest 1.04 billion bushels of corn - a record for the second year in a row - surpassing 1.03 billion last year. Nationwide, farmers are projected to produce 14 billion bushels, eclipsing the previous record of 13.9 billion, also of last year.
Indiana's soybean crop could reach 279.9 million bushels - third-largest for the state - compared with 264.7 million last year. Farmers nationwide could produce a record 3.82 billion bushels, up from last year's 3.29 billon.
"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. "Overall good weather across the nation has provided just about ideal growing conditions."
Akridge, an agricultural economist, moderated a Purdue Extension panel discussion of agriculture experts who analyzed the USDA's August Crop Production Report, the first projection of 2014 crop yields for the fall harvest. Panelists were Ted McKinney, director of the Indiana State Department of Agriculture; Chris Hurt, Extension agricultural economist; Bob Nielsen, Extension corn specialist; Shaun Casteel, Extension soybean specialist; and Greg Matli, the NASS's Indiana statistician, who gave a report on the projections.
While the total production signals a bounty of corn and soybean supplies that will provide enough product for livestock and ethanol producers and eventually help to moderate increases in food prices, futures prices for both crops have dropped to their lowest levels since 2010 - corn below $4 per bushel and soybeans 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.
"Prices are one of the things that isn’t so positive in this report," Hurt said. "The revenues will be down sharply this year." He said crop farmers’ incomes could fall 25-30 percent.
Preceding the panel discussion, the Purdue Center for Commercial Agriculture and Indiana Farm Service Agency held a conference to explain financial implications for crop farmers under the 2014 farm bill and the choices they would have for financial protection.
The bounty of crops, however, will be good for businesses such as grain elevators, processors and livestock producers "who will benefit from the lowest prices we have seen in a number of years."
Nielsen said that while some parts of Indiana have been getting dry lately and some corn crops are losing nitrogen or showing disease, there are no widespread problems. He noted that the crop is ahead of the five-year average in development.
"It is a good-looking crop - good potential - but it needs to finish strong to realize that potential," Nielsen said.
Casteel said soybeans had a "rough start" with problems involving stand establishment and herbicide injury and cool weather that delayed its development. But he noted that the crop progressed to the point where it, too, is now ahead of the five-year average in development.
"As we look to finish this crop, August and September makes the difference," he said. "There are lots of opportunities in the next 30-45 days to finish off this crop."
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.
Indiana soybeans were expected to yield 51 bushels per acre, the same as last year. Nationally, yields per acre were projected at a record 45.4, up 2.1 from 2013.
The projections were based on conditions as of Aug. 1. The NASS will report final, estimated per-acre yields and total production in January.
McKinney said the crop report reflects that "one hand versus the other is coming into play."
"It’s always a good thing to have those high yields, he said." On the other hand, the revenue will be down sharply, and that’s not a good thing."
McKinney said he was encouraged however, that the livestock sector is coming back.
"Just about as anything in life, diversity is good," he said. "On the balance, we hopefully will see Indiana in good shape."