INDIANAPOLIS, Ind. — At the Indiana State Fair last Thursday, Purdue University experts convened in a panel to analyze the USDA’s rather surprising World Agricultural Supply and Demand Estimates and Crop Production reports for this month.

 

The estimates were calculated by the USDA from scientific assessments of thousands of corn and soybean fields throughout the Midwest. On the panel were Shaun Casteel, an extension soybean expert and Chris Hurt, an agricultural economist.

Both were surprised at the high yield estimations, with corn in particular pegged as the third-highest yield in history if realized.

Soybean production is estimated at 4.38 billion bushels nationwide, up 2 percent from last year. Yields are estimated at 49.4 bushels per acre, down 2.7 from last year. The harvest area is forecast at a record high of 88.7 million acres, up 7 percent from 2016, and planted area is estimated at a record high 89.5 million acres.

In Indiana, production is pegged at 324 million bushels, slightly below the 324.3 million produced in 2016. Expected yield is 55 bushels per acre, 4 percent below last year’s 57.5; estimated harvested acreage is at 5.89 million acres, 4 percent above 2016.

Corn production is estimated at 14.2 billion bushels nationally, down 7 percent from 2016. Yields are expected to average 169.5 bushels per acre, down 5.1 from 2016. Area harvested is estimated at 83.5 million acres, down 4 percent from 2016.

In Indiana, 2017 corn production is forecast at 929 million bushels, down 2 percent from 2016. Unchanged from last year, Indiana’s expected yield is 173 bushels per acre, at 5.37 million predicted acres for harvest, 2 percent below 2016.

All wheat nationwide is down 25 percent from 2016, this year at 1.74 billion bushels. The yield is forecast at 45.6 bushels per acre, down 7 from last year.

In soybeans nationally and in Indiana, Hurt and other experts are anticipating yield estimates to be lower.

 

“The USDA has the most observations of the fields, as they have the most science behind actually looking at these yields,” Hurt said. “So this is the best information we have at this particular point.”

Soybeans will have a somewhat lower yield than last year, but still high, he said, which is the good news; the bad news is a larger crop means revenues will be less.

“Unfortunately, when we have very large crops, we see production go up 2 percent, and we may see prices go down 4 percent,” Hurt said.

Casteel was “a little shocked” with where the crops and expected yields are at now, considering the heavy rain on Indiana fields during planting season.

“We’ve had quite the season,” he said. “We had three planting days within the soybean world – we had April 25 for about six hours and May 18 for about eight hours, and June 1 for about 24 hours. Those planting windows were very tight.”

Casteel noted planting was followed by 3-4 weeks of cool, wet conditions, causing plants to struggle to emerge. Soybeans were in most cases replanted once or twice.

Ed Ebert, senior director of grain production and utilization for the Indiana Soybean Alliance and Indiana Corn Marketing Council, was also surprised while watching the report come out in Washington, D.C., with eight of his colleagues. “Some of the farmers were pretty skeptical based on their own experiences and what they have been observing on their own farms,” he said.

Casteel said there is a slow seed-fill rate in these crops. Thus, at the end of this season, if sunlight and cooler temperatures are maintained and an early freeze does not occur, the predicted yield can be realized.

He said the next 30-45 days are going to be critical to reach the top yield potential. At the moment, soybeans are rated 51 percent good-to-excellent, down from 2016’s 70-78 percent good-to-excellent rating.

In corn, Hurt said the yield estimates also came out higher than expected, at 3.5 bushels higher than trade was anticipating Thursday morning. As with soybeans, higher yields for corn this year means a yield as good as 2016. Based on the current estimates, the 2017 corn crop will yield the third-highest in history. But again, Hurt said this may lower revenues and tighten margins.

On the planting side for corn, Casteel said in many cases there were up to four plantings in one field until June. This caused “Swiss cheese” fields, with several spots where no plants emerged.

“We get to a point where you just can’t plant anymore and have to live with what you have,” he said. “And those ‘Swiss cheese’ holes won’t be producing yield, so what these predicted high yields is telling us, is that the crop that is there in those fields is awfully good.”

Like the soy, he said the next 30-45 days are going to be critical to reach top yield. For those fields planted nearer to the first of June, they will need well into September to finish. Right now, there is about a 49 percent good-to-excellent rating for corn, in comparison to last year’s 70-78 percent good-to-excellent rating. 

 

Hurt said production costs are generally stable this year, with cash rents remaining stable and fertilizer prices lowering a little.

In addition, the USDA increased some export projections, but this will not be enough to widen margins based on the estimates.

 

“This is now our fourth year of very tight margins for Indiana grain farmers," he said. “There was hope that maybe this would be the turnaround year, but I think at this point that doesn’t appear to be the case. We’re going to continue with these tight margins and relatively low prices, but good overall production.”

Ebert suggested some of the high estimates may come from USDA’s use of averages to calculate yields. For example, because ear weights in corn are unknown now, statisticians used average weights in place of actual weights this year. He said with the overabundance of water during planting season, ears may be in poorer condition than average.

Hurt and Ebert both feel part of the difficulty in estimating the yield was uneven conditions of corn and soybeans nationwide.

“Crops actually look very good in southern Indiana, and they look good in northern Indiana,” Ebert said.

“It’s really the central part of the state that’s had a lot of the challenges planting and replanting.”

The same can be said for elsewhere in the Corn Belt. This year the Dakotas and Iowa are seeing steep declines in overall yield compared to other states. 

After the release of the USDA estimations Thursday, prices for soybeans went down 33 cents and prices for corn went down 15 cents a bushel; however, those numbers improved Friday.

“When you look at the reaction to the report, 15 cents on corn and 33 cents on beans is certainly a big move in one day,” Ebert said. “But the fact the prices stabilized Friday indicates to me that the market is still trying to digest what all this means.”