Farm Futures reports:
Six years in a row of above average corn and soybean yields look ready to end in 2019, following challenges from weather and trade disputes. Farm Futures latest survey of growers shows sharply lower production of both corn and soybeans due to a combination of reduced acreage and lower yields.
While late development of crops means weather could still impact the size of both crops, this first glimpse at 2019 results shows the unusual growing season already took a toll. Total estimated corn and soybean acreage is down 15.3 million acres, or 9% from 2018 due to economics and record spring floods that prevented farmers from planting a record number of acres.
Farmers said they put in just 83.5 million acres of corn, the lowest amount since the ethanol boom began in 2006. Yields of 167.2 bushels per acre would generate a crop of 12.723 billion bushels, the smallest since the drought year of 2012. By contrast, USDA put 2018 production at 14.42 billion bushels based on yields of 176.4 bpa and planted acreage of 89.1 million.
The decline in soybean output is nearly as dramatic. Farmers put yields at 48.4 bpa with planted acres at 79.6 million, for total production of 3.816 billion, down 16% from USDA’s last estimate for 2018.
But much could change over the next month or two, depending on weather during the rest of the growing season. While weather forecasts for August don’t look especially threatening, late developing crops could be vulnerable to frost. That could trim yields and force some growers to harvest fields for silage, not grain.
Late planting appears to be the key factor for lower yields, especially corn. Warmer and drier than normal July weather in parts of the Corn Belt was offset by wetter weather in much of the west. Vegetation Health Index readings also suggest lower than normal yields for both corn and soybeans, but not dramatic reductions, similar to weekly crop ratings put out by USDA.
The real question USDA will answer in its Aug. 12 reports is acreage. According to the Farm Futures survey, that’s the biggest factor creating lower production this year. USDA is resurveying growers who were still planting during its June survey, in addition to obtaining data from growers on yields. The government also reports acreage farmers certified to the Farm Service Agency on Aug. 12, which will provide details on how much ground farmers were prevented from planting.
The results of Farm Futures survey suggest the Aug. 12 reports could have the biggest impact on corn prices. The survey’s totals for soybeans were close to USDA’s last guess in July, though acreage could be a wild card. But Farm Futures production estimate for corn is down sharply from the agency’s last guess. Depending on demand changes, a 12.7-billion-bushel crop could reduce carryout at the end of the marketing year to 1.3 billion bushels, supporting higher prices.
Farm Futures surveyed more than 1,150 farmers from July 19 to Aug. 4. Farmers were invited by email to participate using an online survey engine.
Since 2007 the August Farm Futures crop production survey has varied from USDA’s August production estimates by an average of 2.7% for corn and 2.6% for soybeans. The difference in yield is 2.7% for soybeans and 2% for corn.