The ripening corn and soybean fields stretch for miles in every direction from Dennis Wentworth’s farm in Downs, Illinois. As he marveled at his best-yielding crops ever, he wondered aloud where the heck he’ll put it all.
"Logistics are going to be a huge problem for everyone," the 62-year-old grower said, adding that he has invested in boosting output rather than grain bins. When harvesting starts in a few weeks, Wentworth expects his 150-year-old family farm to produce 10 percent more than last year’s record. "There are going to be some big piles of grain on the ground this fall."
From Ohio to Nebraska, thousands of field inspections this week during the Pro Farmer Midwest Crop Tour show production of corn could be 1 percent more than the government’s estimate and soybeans 1.2 percent higher, according to a Bloomberg survey of crop scouts. Months of timely rains and mild weather created ideal growing conditions, leaving ears with more kernels than normal on 10-foot (3-meter) corn stalks and more seed pods on dark, green soy plants.
Prospects of bumper harvests sent Chicago futures tumbling into bear markets last month, two years after a drought eroded output and sparked the highest prices ever. Cheaper grain is bolstering profit for buyers including Tyson Foods Inc. and Archer-Daniels-Midland Co., encouraging some cattle producers in the Great Plains to expand herds, and eroding income for farmers who say increased output will make up for some of the slump.
Corn on the Chicago Board of Trade has tumbled 21 percent since the end of May to $3.69 a bushel yesterday, and soybeans are down 30 percent to $10.3825 a bushel. The Bloomberg Commodity Index slid 6.2 percent over the same period, while the MSCI All-Country World Index of equities rose 2 percent. The Bloomberg Treasury Index gained 0.5 percent.
Samples in Illinois, Ohio, Indiana and Iowa -- representing 45 percent of forecast U.S. corn output and 41 percent of soybeans -- showed bigger yields than last year, according to inspections on the 22nd annual Pro Farmer crop tour, which ended yesterday. Corn production will be 14.178 billion bushels, compared with 14.032 billion bushels estimated by USDA, according to a survey of 13 grain company and hedge fund analysts on the tour. Soybean output was forecast at 3.861 billion, versus the government estimate of 3.816 billion.
The volunteer scouts on the four-day crop tour drove more than 15,000 miles across seven Midwest states, the biggest growing region, taking random samples by counting the number of kernels on corn ears and pods on soybean plants. Editors of the Pro Farmer newsletter will issue final estimates of U.S. output today, partly based on this week’s measurements.
In Illinois, where the U.S. Department of Agriculture predicted this month that yields will be 188 bushels an acre on average, the tour estimated 197 bushels an acre, up 16 percent from the same areas surveyed last year. In Iowa, preliminary samples showed 1,107 soybean pods per 3 square feet, up 18 percent from last year.
The outlook has improved after months of ideal weather. Through Aug. 16, the majority of the Midwest was slightly dry to abnormally moist, according to a weekly Crop Moisture Index from the National Oceanic and Atmospheric Administration. Temperatures that have been cooler than normal will remain average or below average through the end of August, the agency forecasts.
The government on Aug. 12 predicted record crops and a drop in exports that will boost reserves. Corn production will rise 0.8 percent from last year’s record to 14.03 billion bushels, and soybean output will jump 16 percent to 3.82 billion bushels, the government said.