By Alison Rice
If anyone can read between the lines of the Jan. 12 USDA reports, it would be University of Illinois agriculture economists Darrel Good and John Newton, and they did just that in a recent presentation.
They started with the big numbers, of course.
“We now have two back-to-back big years of corn production,” Newton says. Yet they quickly moved on to the details.
The two took time to highlight a 96-million-bushel reduction in 2013 corn crop production and an adjustment for 2014, which rendered the crop “smaller than anticipated” at 14.2 billion bushels, according to Newton.
Here’s what the duo noticed in the slew of data.
Large Downward Revisions For Corn Production: The change in yield proved to be even greater, though 171 bu. per acre remains a record. “The USDA came down 2.4 bu.” between November and January, which represents the largest downward revision to corn yield in the past 10 years, according to Newton.
Larger-Than-Normal Gap Between Official Acreage Figures: “One of the ongoing storylines this fall has been comparing National Agricultural Statistics Service (NASS) and Farm Service Agency planted acreage of corn,” Newton says. The difference stood at 4.3 million acres at press time, though experts expected the gap to narrow.
Significant Amount Of Corn Is Available In Inventory: The grain stocks supply stood at 11.2 billion bushels. “It’s not surprising this inventory is large given the size of the crop we have,” Good says. Consumption levels mean a larger inventory is “not necessarily bearish.” Prices will hover around $3.65 during the marketing year.
Soybean Producers Face A Surplus Of Grain: This year’s 3.97 billion bushels represents an all-time high. “Given the magnitude of year-ending stocks and now what appears to be a much larger South American crop, there’s some question whether we can really hold soybean prices at $10 moving forward,” Good says.
By Sara Schafer
Iowa Farmland Values Show Biggest Decline in 28 Years, Survey Reveals
The scales have tipped for Iowa farmland values. After several years of dramatic increases, 2014 marked a drop in value.
The average value of an acre of Iowa farmland stood at $7,943, a drop in value of $773, or nearly 9%, per acre from 2013.
“This the sharpest decline since 1986,” explains Mike Walsten, editor of LandOwner newsletter.
Keep these numbers in perspective, though. “The value of Iowa farmland is still double what it was 10 years ago,” he cautions.
Although this marks the largest decline in farmland values in 28 years, it is only the second year since 1999 that the survey has shown a decline in farmland values. After hitting a historic peak in 2013, values have returned to a mid-point between 2011 and 2012 values. In spite of the decrease, farmland values remain 81% higher than 2009 values and 18% higher than 2011 values.
“I think we have seen a peak for the time being,” says Michael Duffy, a retired Iowa State University economics professor and Extension farm management economist, in a news release. “Commodity prices and farm income are settling back to more expected levels, and I think land values will probably move sideways for a while.”
By Nate Birt
Weather Creates Peanut Concerns
Peanut producers in Alabama fear aflatoxins could harm their crop this year as dry and hot conditions create opportunities for the mold to make inroads, according to a report by The Associated Press.
Scattered rainfall at planting can be faulted in large part, says Kris Balkcom, a research associate for Auburn University. At press time, yields ranged from 200 lb. to 3,000 lb. per acre, a “staggering variety.”
Producers still have options for salvaging crops that are impacted thanks to advances in technology.
“More than likely they’ll try to clean them and pick out those bad ones,” he says. “If they can’t clean them up, they will be crushed for oil.”