The farm-gate value of U.S. corn and soybeans, the two most widely grown crops in the country, will fall 16 percent compared to last year’s harvests due to a steep drop in commodity prices, according to USDA data. The season-average price for corn was forecast to be $1.70 a bushel below the near-record prices paid for the 2022 crop, and soybeans were expected to be $1.50 a bushel below last year’s price.
Production of the crops is surging worldwide; global corn output should rise 5 percent and soybeans 9 percent during 2023/24, according to USDA. Commodity prices have run at high levels since 2020, driven by strong global demand and, since February 2022, fears of shortages due to Russia’s invasion of Ukraine. Prices spiked immediately after the invasion and declined in following months as supply chains adjusted to the disruption. For months, analysts have forecast lower commodity prices and a resulting decline in U.S. farm income this year.
This year’s corn and soybean crops would be worth nearly $127.5 billion, almost $24 billion less than the combined $151.4 billion value of the 2022 crops, based on USDA estimates of crop size and season-average prices. With the fall harvest at hand, the USDA estimated corn would fetch an average $4.90 a bushel and soybeans $12.70 a bushel. By contrast, the 2022 crops were averaging $6.60 a bushel for corn and $14.20 a bushel for soybeans.
In its first estimate of the fall harvest, the USDA said the corn crop would be the second-largest on record at 15.1 billion bushels — 10 percent larger than last year despite dry weather in June and early July. In pursuit of profits, farmers planted more land to corn this year and will see slightly higher yields per acre, said the USDA. As usual, the five largest corn-growing states will be Iowa, Illinois, Nebraska, Minnesota, and Indiana; they are expected to produce 60 percent of the crop.
The soybean crop was forecast at 4.21 billion bushels, 2 percent smaller than last year and the eighth-largest ever. Higher yields per acre — up nearly 3 percent — nearly offset a 4 million-acre decline in plantings. The five leading states, Illinois, Iowa, Minnesota, Indiana, and Nebraska, are expected to produce 52 percent of the crop.
Cotton growers were forecast to harvest 14 million bales, down 3 percent from the drought-hit 2022 crop. The rice crop of 203.6 million hundredweight would be 27-percent larger than last year due to larger plantings in every rice state except Texas and higher yields everywhere. At 1.73 billion bushels, the wheat crop would be 5-percent larger than in 2022.
The August crop report often is called the most important of the year because it is the USDA’s first estimate of the fall harvest. This year, USDA interviewed 14,700 growers nationwide about probable yields. In September, the USDA will incorporate the results of yield surveys of selected corn and soybean fields.
In the past 20 years, the USDA estimate of the corn crop in August was larger than the final harvest figure 12 times and smaller in eight years. For soybeans the August estimate has been below the final harvest figure in 13 years and higher in seven years. The USDA says the corn estimate has a margin of error of plus or minus 4 percent and the soybean estimate has margin of error of plus or minus 6.3 percent.