It has been a productive year in agriculture in the Peoria area. The two crops dominating the landscape, corn and soybeans, have both benefited from favorable summer growing conditions. Although we did have some dry weather in July, especially in the Brimfield area, yields seemed to hold up. Dark topsoil with a large water-holding capacity definitely helps crops weather dry spells in these productive areas.
The U.S. Department of Agriculture forecasts that Illinois corn is to average 214 bushels per acre and soybeans to average 66 bushels per acre. If this harvest number materializes, 214 bushels per acre would be 13 bushels more than the previous record. In fact, six states are forecast to set yield records this fall: Illinois, Iowa, Indiana, Ohio, Nebraska and South Dakota. Illinois usually duals it out with Iowa in claiming to be the top state with the highest production of both corn and soybeans.
Storage of this year’s crop has been at a premium. With such a large harvest, farmers need to be able to safely store their crops and keep them out of the elements. In years when there is a large harvest, you can often see corn being piled outside of country grain elevators because the grain bins are already full. Ideally, this corn would be covered with a tarp to protect it from rainfall. Soybeans, on the other hand, cannot be stored outside, as they have a much thinner seed coat and would immediately swell and rot after a rain. Many grain bin structures have been built in the past five years on both farmsteads and commercial grain elevators to satisfy these increasing yields.
The prices that farmers receive for their corn and soybeans, on the other hand, have fallen since planting the crop in May. At planting, prices for a bushel (60 pounds) of soybeans reached $10, and for a bushel of corn (56 pounds), the price was nearly $4. As we entered the harvest window in mid- to late September, prices had dipped to $7/bushel for soybeans and $3/bushel for corn. Crops are bought and sold in a free-market system. When the supply is burdensome and demand does not increase in step with production, prices are pressured to decrease, just as we have seen this past growing season.
Farmers are hopeful that trade agreements can be reached with our trading partners. Over the last decade, China has been a very large purchaser of U.S. soybeans. China also has a convenient option to buy some of its soybeans from South America (Brazil and Argentina), where the growing season is just the opposite of U.S. farmers: when we are thinking about planting soybeans, they are harvesting, and when we are harvesting, they are planting. This is a great purchasing scenario for worldwide customers of soybeans, as there is a supply year-round.
On another front in agriculture, the 2014 Farm Bill expired September 30, 2018, without a replacement bill. Farm bills are supposed to be approved by Congress every five years. The bulk of the funding is for the food and nutrition program; crop insurance, conservation programs and forestry funding are also included. If a new farm bill is not passed by the end of the year, the process, including nationwide hearings, will have to start over. There is definitely an incentive for Congress to pass a new farm bill soon, and farmers hope they can get it done. It will make long-term planning much more palatable. iBi