2015 Farm Income & Harvest Weather Forecast - Tuesday, 25 August 2015

Today the USDA announced a grim outlook for farm income.  Net farm income is expected to decline to $58.3 billion, a 36% drop this year, the lowest since 2006.  This is the largest year to year decline that the U.S. has seen since 1983 and is a result of the fall of commodity values, 7% on corn and 12% on soybeans. 

Harvest has begun and is running ahead of normal pace is all states.  Louisiana is 87% complete, Georgia 62%, Mississippi 52%, and Texas is reporting 47% harvested.  There are also reports saying that some fields in the Eastern Corn Belt are being harvested for silage use.

 

 

Corn continues to struggle with bearish news; higher than expected USDA production estimates, higher than expected South American yields and weak Chinese demand.  Market bulls are hoping that a potential 20% reduction in corn acres next year in South America and an overstated USDA production estimate will help push our grain prices higher.  The Argentine government is planning to offer subsidized farm loans to corn producers to try to persuade farmers to produce more corn production this next season. 

 

The soybean crop is also beginning to be harvested in a few states.  Louisiana reports 15% completed, Mississippi 8% and Arkansas sits at 1% harvested.  Global economic problems and continued worries in China are all adding pressure to our markets; soybeans have now posted lows we have not seen for 6 years.  The U.S. Dollar has taken a tumble lately but when you compare this to the 12-year low of the Brazilian Real currency it’s easy to see why we face a continued up-hill battle when bargaining with other nations that also purchase grain from Brazil.  The exchange rate makes the price spread a difference of $0.30 per bushel on corn which is difficult to make up for with more favorable freight rates.  Because of this demand for Brazilian crops, ships are again backed up waiting to load corn and soybeans.  Right now there are approximately 82 vessels lined up to load corn compared to 40 a year ago.  An additional 80 are waiting for soybeans compared to 57 a year ago.

 

 

 

Harvest is several weeks out for our region but the Weather Channel Professional Division has issued their temperature forecast for our harvest months of September through November.  As you can see from the map below much of Iowa is expected to see temps below average while eastern Iowa and most of the East can expect above normal temps. 

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