Politics & Government

USDA Report Shoots Grain Prices Up

Actual production numbers are lower than expected.

Farmers and stock brokers held their breath this week waiting for Thursday's crop production report from the U.S. Department of Agriculture. This was the first estimate from the USDA based on actual information about the fall corn and soybean crops. Trading shot up as the report revealed less production than expected.

Thursday's corn yield showed 153 bushel average, which is two-tenths higher than last year's 152.8, but lower than expected. Under ideal or normal conditions, the trend line anticipates a slight increase each year, according to Agriculture Economist Bill Johnson, a professor at Joliet Junior College. This  year's expectation was 162. 

There are always going to be questions in the USDA numbers, Johnson said. However, the report took into account the affects of early wet weather and the recent hot weather.

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The early rain resulted in compaction, which stunts root growth. The rain also drowned out acres that delayed growth. Subsequently, the heat has impacted pollination in some cases, which decreases yield. 

The report also showed a state-by-state estimate of yields. Iowa's yield is 177 bushel average, compared to Illinois' 170. 

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"My guess is that Iowa may be 177, but Illinois is not that good," Johnson said.

Johnson has traveled extensively and seen the fields first-hand. He offered another way of looking at the comparison.

"Or if Illinois is 170, then Iowa must be over 180 because Iowa is considerably better than Illinois this year," he explained.


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