Even Lower Corn Prices Coming

August 15, 2000

The crop report released Friday by the USDA, based on Aug. 1 conditions, forecasts a 10.369 billion bushel corn crop, the largest on record. That may look good in terms of production but it will mean even lower corn prices, according to Paul Bertels, director of marketing and production at the National Corn Growers Association.

Record production totals are a result of an increase in the harvested acreage in ideal growing conditions across most of the Corn Belt. The eastern half of the Corn Belt saw the largest crop increase with production in Kentucky, Illinois, Ohio and Indiana increasing by 22, 17, 16 and 15% respectively. Missouri should see the largest production increase in the western Corn Belt with a 60% jump from last year.

Other western Corn Belt states showing significant increases are Kansas (11 percent), Texas (9 percent), South Dakota (8 percent), Iowa (6 percent) and Minnesota (3 percent). The mid-Atlantic States, devastated by last year's drought, are expected to rebound tremendously with production in Pennsylvania, Virginia, Maryland, Delaware and North Carolina, up 116, 79, 79, 74 and 29 percent respectively. Of the major corn producing states, only Wisconsin, Nebraska and Michigan are projecting smaller crops.

"While this large crop looks good on the production side, these huge stocks of grain will continue to drive prices lower," noted Bertels. "Despite record use, corn carryout stocks will exceed 2 billion bushels."

What would it take for a turn-around in low corn prices? "Either a short crop next year, or a bump in exports, which may happen because corn prices are so low," Bertels said.