With the national average yield projection for corn raised to 169.3 bushels per acre, the estimated price paid to farmers decreased by 15 cents this month according to the U.S. Department of Agriculture report released today. The new yield projection coupled with decreased demand estimates for ethanol and exports are expected to drive prices lower. If achieved, the 2015 national average yield would be the second highest on record.
“With the corn harvest nearly complete, we see clearly the incredible abundance American farmers can produce, but we also realize that this excellence does not always bring an equivalent economic reward” said National Corn Growers Association President Martin Barbre, a farmer from Carmi, Ill. “While we have sustainably produced a crop that can feed and fuel our growing world, market forces are negatively impacting the price which we will be paid. It is of the utmost importance that, during times such as these, we rededicate ourselves to NCGA’s ongoing efforts to stimulate demand for our growing crop.”
Overall production was raised by 99 million bushels to 13.6 billion reflecting the higher yield estimates. The increase in yields came, in large part, from a six-bushel-per-acre yield increase in Iowa, where harvest progress increased by 56 percentage points since the previous report. Dramatic increases in average yield were also seen in northern states such as Minnesota, North Dakota and South Dakota.
Corn usage in the ethanol sector was lowered by 75 million bushels, with some of the reduction offset by a 25-million-bushel increase in expected feed and residual use. Decreased export forecasts, which were lowered by 50 million bushels, reflect strong competition from Brazilian corn exporters who currently hold a price advantage.
With ending stocks projections raised by 19 million bushels, the 2015/16 season-average corn price received by farmers is projected 15 cents lower on both ends to $3.35 to $3.95 per bushel.