OREGON, Ill. — Steve Johnson’s crystal ball was looking
toward the June 30 U.S. Department of Agriculture planted acres report.
“We think at least an extra million acres will show up on
Monday at 11 a.m. Most of them will be in beans, and part will be in corn. We
think the March 31 report underestimated the acreage by two (million) to three
million acres,” Johnson told an audience at the Ogle County Farm Bureau building
Johnson was speaking at a market outlook and farm bill
seminar sponsored by county Farm Bureaus from Ogle, Lee, Carroll and Whiteside
The veteran Iowa State Extension ag economist called it.
On June 30, the June 1 planted acreage for corn stood at
91.6 million acres versus 91.691 million acres in the March 1 report. Soybean
planted acres jumped to 84.8 million planted acres on June 1 versus 81.493
million in the March 1 report.
Johnson urged farmers to participate in the USDA surveys,
noting that non-participation hurts everyone.
“In the March report, we believe that farmers were slow to
respond to the survey. A lot of farmers have checked out. They’re not telling
the government anything. They’re hurting themselves,” he said.
“We think somewhere in the neighborhood of five million
farmers didn’t respond to the USDA when they made the phone calls in March. If
they didn’t respond in Illinois, then they underestimated the number of corn and
bean acres in Illinois. My charge is this — when USDA calls, help everybody out.
Be honest. Say, yes, I’ll respond to your survey,” he said.
Even though he spoke before even more rains and wind wreaked
some havoc on the Midwest corn and soybean crop, Johnson noted that farmers
should be prepared for a large 2014 crop.
“I believe in Iowa it is probably our best crop that we’ve
had since 2004. There are just not a lot of holes in Iowa, and there are not a
lot of holes in the Corn Belt right now. You should mentally prepare yourselves
for a large corn crop,” he said.
USDA estimates predict 600 million more bushels of corn in
August 2015 from August 2014.
“We’re going to have extra corn a year from now, and then
you’ve got to look and say how much production do we have? We’re going to
produce almost the same size corn crop in 2014 as we did in 2013 on 3.5 million
fewer acres. How do you do that? Yield,” Johnson said.
The USDA corn yield projection for the 2014-2015 crop year
is 165.3 bushels per acre for corn.
“When was the last year that the U.S. grew a 165.3 average
corn yield nationwide? Never. That’s a long time. We grew 164.3 in 2009,”
He took his audience back in time to 2009.
“What do you remember about 2009? You were still picking
corn in January. The reality is the last time we had yields like that, it was
‘09. It was one of those years, every five years, that we get. It was record
large and record wet, and we didn’t know it was there until the January report,”
he said. “I think this year feels a lot like 2007 or 2009.”
The demand for this possibly record crop of corn poses
another big question.
“Look within this. This is about the same size crop, and the
feed usage goes down. Why would we need less feed? Primarily because we are not
increasing the size of our herds. We’ve not increased our beef herd yet. We’ve
not increased our dairy herd, and we lost seven million pigs this winter. They
died of the (porcine epidemic diarrhea) virus,” Johnson said. “We’ve got less
demand for our corn than we’d anticipated.”
While ethanol demand is steady, the demand for more bushels
for ethanol has not occurred.
In addition, competition from other countries in the global
corn market is getting stronger.
“Look what USDA is doing to exports, dropping exports 200
million bushels. Why would they drop our exports? The world population, they
need our corn. Global competition, folks. We’re not the only ones who grow No. 2
yellow corn. Ukraine has a good crop coming. China has a good crop coming. You
just don’t hear about major weather problems in the northern hemisphere right
now. So there will be lots of corn out there and available,” Johnson said.
He said that for the 2014-2015 marketing year, Robert
Wisner, Iowa State University biofuels economist, predicted a 64 percent
probability that the cash price of corn would be $4.25, with a 15 percent
probability of $4.85 per bushel cash corn and a 21 percent probability of $4 per
bushel cash corn, using a 92.3 million planted acres and a 164-bushel per acre
national average yield.
“Eighty-five percent odds, we think that cash-priced corn is
going to be in this $4.25 to $4 range. That’s for every bushel that’s sold
beginning Sept. 1, 2014, to Aug. 31, 2015,” Johnson said.
The soybean picture was much the same, Johnson said.
“It’s the largest U.S. bean crop planted in history, 81.5
million acres (as of June 25). It’s the largest U.S. bean yield in history, 45.2
and we’ve got too many beans come fall,” he said.
In answer to an audience question of why the trade still was
moving $12 beans, Johnson harkened back to an old saying.
“I remember the old saying, ‘corn is made in July, beans are
made in August.’ We’re a lot closer to the corn being made than the bean crop
being made,” he said.
Johnson said the bell-curve graph of the soybean cash price
probability forecast from Wisner shows a 17 percent probability of $14 per
bushel cash beans, a 64 percent probability of $10 per bushel cash beans and a
19 percent probability of $9.80 per bushel cash beans, using 82 million acres
planted and a 43.5 bushels per acre national average yield.
The year 2009 poked its head up again when Johnson noted
that forecasters have a high probability of the northern hemisphere entering an
El Niño weather pattern by mid-summer.
“Since about Christmas, the forecast has been that the
temperatures are warming in the Pacific Ocean off the coast of Ecuador. The
waters are warming. We’ve known since Christmas that El Niño was probably
coming. We still don’t know when. It’s still not official. We’ve been in
neutral, somewhere between warm waters and cool waters, since last fall,” he
“You say what does that mean for the Corn Belt? Timely
rains, cooler summers. When is the last time we had an El Niño summer? 2009, one
of those ‘five’ years. What was the corn yield? 164.3. We didn’t set a new bean
yield, we set a new corn yield,” he said.
But while forecasters and the federal government can make
predictions on acres and yield, Johnson said only Mother Nature knows the final
“It’s all going to come down to weather, and I don’t think
we can forecast weather much more than about four or five days,” he said.