Price of corn drops with release of report
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A crop report released Tuesday forecasted a surplus in corn and soybeans as farmers planted more than was expected this year, causing a sharp drop in the price of corn.
Chad Hart, assistant professor of economics, said this surplus forecast was both good and bad news for Iowa.
“It does affect Iowa, sure, because we’re getting a lower price for the crop that we’re growing in most of the state,” Hart said. “But if you’re a livestock producer here in the state, this was a good report for you. Bigger corn supplies means lower corn prices, and it’s cheaper for you to feed your herd.”
When the report was released, the price of corn fell 30 cents.
“Let me put that into perspective. A 30-cent drop in the price of corn is about a 10 percent drop in price,” Hart said. “That’s a sizeable drop.”
While this drop is certainly big, it is not an accurate reflection of what the price of corn will be when the crop is finally harvested.
“This report is a pretty good estimate of how much was planted, but as you drive across Iowa you’ll notice those crops are still growing,” Hart said. “There’s a lot that can happen to a crop between now and when it’s actually harvested. So what yields are actually going to be is still way up in the air.”
According to the U.S. Department of Agriculture, 77.5 million acres of soybeans had been planted, and 87 million acres of corn had been planted.
“When farmers went to the fields this spring, it was pretty wet, and a lot of the reports were saying that we were behind in getting it into the ground,” Hart said. “But if you look here in Iowa and to the west, in states like Nebraska, they were actually able to get into the fields pretty early, and they planted more than they told the USDA they did.”
Hart said the USDA sends out surveys to farmers in March to obtain their planting intentions.
“Then they wait until the beginning of June, and then they survey them again and say ‘what did you actually plant?’ In between March and June, well, we increased. Farmers had the opportunity to plant more corn, and they did,” he said.
Chad Hart, assistant professor of economics, said this surplus forecast was both good and bad news for Iowa.
“It does affect Iowa, sure, because we’re getting a lower price for the crop that we’re growing in most of the state,” Hart said. “But if you’re a livestock producer here in the state, this was a good report for you. Bigger corn supplies means lower corn prices, and it’s cheaper for you to feed your herd.”
When the report was released, the price of corn fell 30 cents.
“Let me put that into perspective. A 30-cent drop in the price of corn is about a 10 percent drop in price,” Hart said. “That’s a sizeable drop.”
While this drop is certainly big, it is not an accurate reflection of what the price of corn will be when the crop is finally harvested.
“This report is a pretty good estimate of how much was planted, but as you drive across Iowa you’ll notice those crops are still growing,” Hart said. “There’s a lot that can happen to a crop between now and when it’s actually harvested. So what yields are actually going to be is still way up in the air.”
According to the U.S. Department of Agriculture, 77.5 million acres of soybeans had been planted, and 87 million acres of corn had been planted.
“When farmers went to the fields this spring, it was pretty wet, and a lot of the reports were saying that we were behind in getting it into the ground,” Hart said. “But if you look here in Iowa and to the west, in states like Nebraska, they were actually able to get into the fields pretty early, and they planted more than they told the USDA they did.”
Hart said the USDA sends out surveys to farmers in March to obtain their planting intentions.
“Then they wait until the beginning of June, and then they survey them again and say ‘what did you actually plant?’ In between March and June, well, we increased. Farmers had the opportunity to plant more corn, and they did,” he said.
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