August crop reports: Rain makes lower 2024/25 prices

Rain makes grain, and two mid-August Department of Agriculture (USDA) reports offered this year's first in-the-field look at just how much corn, soybeans, and wheat–as well as other crops like sugar and cotton–American farmers will grow this wet, grain-making year.

On Aug. 12, USDA estimated that the 2024 U.S. corn crop would total 15.1 billion bushel (bu.), a small decline from a year ago but still the third largest crop ever. A record per acre national yield, pegged at 183.1 bu., is almost 6 bu. more per acre than in 2023.

High production usually means low prices and USDA estimates the 2024/25 corn crop's average price will slump to $4.20 per bu., 45 cents per bu. lower than the about-to-end current crop year and a wallet-thumping $2.34 per bu. under 2022/23's average of $6.54.

Bigger production also means bigger ending stocks but falling prices can trim the rising stockpile if they spur new buying. USDA does not see that happening in the coming year. Worse, ethanol makers will use the same amount of corn this year as last, 5.45 bill bu., while exports will climb an almost imperceptible 50 million bu.

That means ending corn stocks a year from now will be 2.07 billion bu., or 10 percent more than today. That's a tough hill for weakened prices to climb.

The coming soybean crop, according to USDA bean counters, will be a whopper: Total 2024/25 U.S. soy production will set an all-time record, 4.6 billion bu., or 10 percent over a year ago. Estimated national yield per acre will also be a whopper: 53.2 bu.

But the staggering crop will bring a price-busting carryover of 560 million bu., or almost 220 million bu. more than this marketing year, and a projected $10.80 per bu. average price, $1.70 under the current year's average and a jarring $3.40 per bu. less than two years ago.

A key part of that price drop hinges on continued increases in global oilseed production, notes USDA. Worldwide, soy and rapeseed production will increase an estimated 4.5 million tons–mostly due to acreage increases in Russia, Ukraine, India, and west Africa's ag-dominated Benin. That anticipated production is already knee-capping U.S. prices.

U.S. wheat producers face the same hill as corn and soybeans despite fewer 2024 planted acres. Better yields, however, kicked production to 2 billion bu., or about 170 million bu. over a year ago.

That boost–as well as growing global competition–means U.S.wheat stocks will again build as prices continue to slip throughout the coming year. For 2024/25, USDA sees all U.S. wheat prices averaging $5.70 per bu., or about $1.25 less per bu. than a year ago.

Rain also makes sugar, both cane sugar in the Deep South–principally Florida, Texas, and Louisiana–and beet sugar in the High North, mostly in Minnesota and North Dakota. Collectively, USDA estimates total 2024/25 sugar production at 9.5 million short tons.

Cotton, too, will see a steep increase in production, up an estimated 3 million, 480-lb. bales, or a whopping 25 percent this year over last. Since American cotton mills are few and far in between, USDA foresees 12 million bales–out of this year's 15-million-bale crop, or 80 percent–will be exported. Stocks, however, will build to keep prices flat.

What this year's wet weather can't grow, however, is more income. In February, USDA projected 2024 U.S. net farm income at $116 billion, or 25 percent below 2023's take. These August production and usage estimates strongly point to that number draining even lower when USDA revises its farm income estimate Sept. 5.

Proving once again that when it rains, it pours.

The Farm and Food File is published weekly throughout the U.S. and Canada. Past columns, recommended reading, and contact information are posted at farmandfoodfile.com.