INDIANAPOLIS — Corn and soybean yield projections have decreased as the nation’s Corn Belt continues to suffer through the worst drought since at least 1956.
According to the U.S. Department of Agriculture’s Sept. 12 Crop Production report, the nation’s corn crop could be just 10.7 billion bushels, down 13 percent from 2011. Those numbers represent the smallest crop since 2006.
Soybean production was forecast at 2.63 billion bushels. That is down 14 percent from last year.
In Indiana, the USDA anticipated 605 million bushels of corn, down 28 percent from 2011. Hoosier soybeans were projected at 184.6 million bushels, down 22 percent from the previous year.
Purdue Extension agricultural economist Chris Hurt said the report can give corn and soybean growers some insight for marketing their crops.
“As we think about marketing, there certainly are some differences between corn and soybeans,” he said. “For corn, current bids into the storage season are relatively flat going across the fall and into the spring, without substantial increases or decreases. What that tells us is that storing corn still makes some sense if one believes corn prices can still rally and that there is limited concern about a major drop in prices.
“Soybeans are different because of the very large South American production. If they have a reasonable growing season, we’re going to start seeing lower soybean prices by maybe January and especially February and March.”
Hurt will explain current grain market dynamics and make recommendations for marketing and producing crops in 2013 during the Indiana-Illinois Farm Equipment Show.
The 34th annual event will be held Dec. 11-13 in the West Pavilion at the Indiana State Fairgrounds in Indianapolis and feature free educational forums hosted by Gary Truitt, president of the Hoosier Ag Today radio network, at 11 a.m. daily.
“Indiana farmers can and will recover from the drought, but it will take careful planning and strategic thinking to get back on track both financially and agronomically,” Truitt said.
On Tuesday, experts from Advanced Ag Solutions in Lafayette and the Farm Clinic in Frankfort will discuss crop and soil management issues, including conservation, fertility and seed selection. Hans Kok, coordinator of the Indiana Conservation Cropping Systems Initiative, also will review the benefits of using cover crops to improve soil fertility and increase yields.
In addition to Hurt’s always-popular market outlook on Wednesday, Somerset CPAs, a full-service certified public accounting and professional services firm in Indianapolis, will present tax law changes that could impact family farms in the new year.
A group of traders and analysts from Indiana and Chicago will provide strategies for farmers, hedgers and speculators on Thursday.
Hurt said strong cash and futures prices will help some grain producers offset drought-induced harvest losses. October grain prices also will influence the amount some insured producers will receive in indemnity payments.
But the reduced yields and high prices do little to help the negative profit margins of livestock producers struggling to feed their herds.
“The livestock industry gets just a tiny bit of reprieve in the sense that corn isn’t as desperately short as I think many people thought going into this report,” the economist said.
“On the other hand, corn prices aren’t going to fade substantially. It’s going to be very difficult for the livestock industry to just hold on as cash flows are probably going to be negative for the most part.”