Is the Stage Now Set For More Yield Cuts in October? Not If A Government Shutdown Stands In the Way
Congress is running out of time to avoid a government shutdown. With just over two weeks to pass 12 spending bills and avoid a total shutdown (everyone but essential federal agencies will be forced to stop their work), one analyst says that could mean no October Crop Production report from USDA just as further yield cuts are likely on tap.
Earlier this week, USDA released its September report, which showed more cuts to corn and soybean yields, but USDA also says farmers planted more corn acres than originally expected.
“It's all related to the farmer and what they report in terms of participation to FSA,” says Dan Basse of AgResource Company. “This is the culmination of FSA data and NASS data. In this case, we found that particularly in North Dakota, farmers planted a lot more corn. That's why corn acres were up almost 800,000 acres. This sort of information used to come out in the October report, but a couple of years ago, they were able to get the data earlier, so it's now coming to light in September.”
Related Story: USDA Tightens Balance Sheet on Soybeans but Raises Carryout on Corn
The next USDA crop report is set to be released Oct. 12, 2023, but Basse doesn’t think it will happen because a government shutdown is likely.
“I'm doubtful we’ll have an October report,” he says. “I'm really concerned about Congress getting a budget passed and the government closing down. We saw President Biden talking about that this week. I'm really worried that if a budget package isn't reached, USDA data may stop if the government comes to a halt and funds are not available.”
The Budget Battle Heats Up
The odds of Congress passing 12 spending bills aren’t high. It’s been nearly 30 years (1997) since the House and Senate passed all 12 spending bills and the president signed them into law before the funding deadline expired.
What makes this round even more challenging is the fact the Republican caucus is at odds. Far-right conservatives are demanding more spending cuts, to the tune of $120 billion, compared with what McCarthy and President Biden agreed to in May.
They have also said they won’t vote for a continuing resolution, which would avert a shutdown, saying the issues need to be addressed now.
"When we come back, we're not going to leave. We're going to get this done. Nobody wins in a government shutdown. I've been here," McCarthy told reporters on Thursday.
More Yield Cuts Are Likely
An October report could be critical, as analysts agree if USDA does release one, more yield cuts are likely.
"Blue Reef Agri-Marketing does our own producer survey, and we took our first crack at it just a week ago,” says Chip Nellinger of Blue Reef Agri-Marketing. “That survey came in with a corn yield right around 169 bu. per acre.”
Basse says AgResource Company currently estimates corn at 171 bu. per acre and soybeans at 49 bu. per acre, both below USDA’s current yield projection of 173.8 bu. per acre for corn and 50.1 bu. per acre on soybeans.
