Barring big changes in production and demand, farmers are likely to see high yields and low market prices continuing into the 2018 season.
That follows a trend of record-high yields for corn and soybeans but lean margin years from depressed prices.
The United States Department of Agriculture estimates that 2017 corn yields in Illinois were 201 bushels per acres, up four bushels from 2016, and soybeans yields at 58 bushels per acre, down 1 bushel from 2016.
That’s another record-high yield for corn, and soybeans saw a record-high production of 612 million bushels.
In Iowa, last year’s corn yields are estimated at 202 bushels per acre, the second time Iowa’s average corn for grain yield has gone above the 200 bushels per acre mark, and the soybean crop yielded 56.5 bushels per acre.
At 10 million acres planted, Iowa saw the most planted acres to soybeans since 2006.
Corn and soybean prices are projected to be relatively similar to the past 3 years and lower than the 2007 through 2014 period when the projected price averaged $4.93 per bushel.
Planning numbers for farmers remain in the mid-$9 range for soybeans and mid-$3 range for corn, and fall delivery bids are near $3.60 per bushel for corn and $9.60 per bushel for soybeans.
“At this point, futures prices suggest that the 2018 projected (crop insurance) price for corn will be near the 2017 price of $3.96 per bushel,” Gary Schnitkey, an agriculture economist at the University of Illinois, said in December. “The 2018 projected price for soybeans likely will be near but lower than the 2017 projected price of $10.19 per bushel.”
Prices could take a hit if the nation pulls out of the North American Free Trade Agreement, which President Donald Trump has suggested, but that remains to be seen. Prices could go up, but it would take a sizable production problem in the U.S. or South America.
Lee Schulz, an agriculture economist at Iowa State University, said many issues surrounding crop markets the past few years are likely to repeat this year.
“Large crop supplies have been produced globally,” he said. “Crop demands have reached record levels, but crop stocks continue to build.”
Farmers have been able to break even or turn a small profit during the trend, though it’s critical farmers are prepared for another lean year by cutting costs and improving efficiency.
“The projected prices in recent years are somewhat of a ‘broken record’ in that the outlook is very similar in each year since 2015,” Schnitkey said. “Given that trend yields are received, projected prices are at levels that, at best, reflect marginal profitably on many farms.”
Putting in early and bulk seed orders could help with costs as seed prices continue to rise.
Another trend likely to continue this year is converting more and more corn acreage to soybeans, which have a more favorable price ratio for farmers as well as higher yields.
“Since 2012, acres in the U.S. have been shifting out of corn and into soybeans, likely as a result of higher returns for soybeans than for corn,” Schnitkey said.
Last year, 7 million less acres of corn were planted than in 2012, whereas soybean acres reached an all-time high of 90 million acres.
Corn was more profitable from 2000 to 2012, though that shifted to soybeans in 2014, according to the Illinois Farm Business Farm Management Association.
Illinois corn and soybean stockpiles both increased from 2016 – corn stocks totaled 2.08 billion bushels, up 5 percent, and soybean stocks totaled 511 million bushels, up 6 percent, according to the USDA.
In Iowa, corn stocks totaled 2.38 billion bushels, down 1 percent from 2016, and soybean stocks totaled 487 million bushels, up 6 percent.