July 13, 1999

USDA lowered its price outlook for corn, wheat and soybeans in its latest supply and demand report released Monday. Sen. Tom Harkin (D-IA), looking for at least $65 billion in farmer aid this year, says it confirms his worst fears about the economic crisis in rural areas.

For corn, USDA now sees prices averaging $1.65-2.05 per bushel compared to a $1.80-2.20 price projection in June. The estimated average price for 1998-99 is $1.95 per bushel. The wheat average price for 1999-2000 is forecast at $2.45-2.95 per bushel, down from $1.60-3.10 forecast in June. The 1998-99 average price was $1.65 per bushel. For soybeans, the price range for 1999-2000 now is $3.90-4.70 per bushel compared to $3.95-4.75 in June and $5 per bushel for the 1998 crop. USDA increased the production totals for all three crops this year.

This report is just one more nail in the casket for thousands of farm families around the nation, said Harkin. A bumper crop will mean even further depressed prices for commodities. How much clearer does the picture have to get before this Congress takes action to provide some emergency assistance?

Harkin has been defeated twice, largely on party-line votes, when he offered his assistance package. He intends to offer it again as an amendment to the agriculture appropriations bill that could be debated on the Senate floor next week.

Republicans have said they recognize there will be low crop prices this year, but they want to wait until fall before judging how much assistance is needed. Harkin's $6.5 billion may be too much or too little, and it's too early to know, a Republican official said. Agricultural problems did figure in a Monday meeting between President Clinton and the Congressional leadership, PRO FARMER reports.

Markets did not seem as shocked by low price projections as politicians, though. Wheat and corn futures closed mixed, with nearby corn contracts up slightly and soft wheat futures also inching up. Soybean futures rallied sharply by as much as 10 cents a bushel. Traders focused on USDA's projection for an 18% upturn in soybean exports in the coming year, THE WALL STREET JOURNAL reported.