Concerns surround big crop forecast
The crops look good in South Dakota for both corn and soybeans.
But it's everything else associated with the crops that is causing some concern, South Dakota State University Extension's Jack Davis said Tuesday at Dakotafest in Mitchell. Davis and his colleague Matthew Elliott spoke about the trends working in favor and against regional farmers.
Davis, a crops business management field specialist for SDSU Extension based in Mitchell, said low prices and concerns about trade and tariffs are dampening what would normally be a strong year.
Nationally, nearly 15 billion bushels of corn are expected, with national yields expected around 178.4 bushels per acre. Almost all of the Midwest is expecting to have higher yields than last year for the corn crop in 2018.
"We've got a lot of ears out there," Davis said.
But prices for corn remain in the mid-$3 range, instead of the $4 per bushel that was around in the spring of this year. Davis said when the Dakotafest organizers contacted him about holding a talk at the annual event, he was on board.
"Things looked so positive," he said. "We got crops in and they were going good and the prices were good. And now, not as much."
South Dakota's corn forecast is calling for 825 million bushels—up 12 percent from a year ago—planted on 4.85 million acres. Those factors are helping to drive up the state's yields to a projected 170 bushels per acre.
Davis noted that's probably based on data and information from the eastern edge of the state than from further west. Nebraska, North Dakota, Illinois, Indiana and Wisconsin are also projected for higher yields than last year.
"There's a lot of weight put on us out here," Davis said, referencing the record projections for both South Dakota and Nebraska.
Soybeans are expected to feel the brunt of trade concerns, considering the U.S. trade battles with China, which is the top U.S. export market. Elliott, an SDSU Extension agribusiness specialist, said that the U.S. has traditionally been able to essentially export soybeans right out of the ground.
"It will make sense for China to import our beans if our price is relatively lower to Brazilian prices and if there's a margin they can make money off of in China," Elliott said. "I think to a certain extent, if they have a built-up supply, they'll be able to get by for a few months and hopefully, a deal will materialize, so we won't see too much of an effect and it's a blip in the storyline."
South Dakota is forecast to produce a record 277 million bushels of soybeans, up 15 percent above last year, with a yield of 49 bushels per acre, up six bushels from last year.
Elliott and Davis both noted that prices have jumped when there's been a whiff of potential trade talks between the U.S. and China.
"Any kind of hint of the removal of the tariff, you'll see the market react and come back," Elliott said.
South Dakota is also planning a big year of winter wheat, forecasted at 37.2 million bushels, up 79 percent, and 42.8 million bushels of spring wheat, up 106 percent over last year, according to the U.S. Department of Agriculture's National Agricultural Statistics Service.