Crops > Outlook & Prices > Outlook & Prices
October 2024
The challenges with big crops
USDA’s reports over the past few months have confirmed that large crops are currently exiting farm fields and headed into the marketing chain. The incredibly strong, and for some crops record, production is great for filling bins, bragging about yields, and building up next year’s insurance yield; but it is also the weight that has driven down prices for a vast majority of this calendar year. Farm incomes tend to be better with lower yields and higher prices than with lower prices and higher yields. And the net farm income projections from USDA reflect that, with incomes dropping from record levels two years ago to roughly equal to the 20-year average now. The projections for the 2024 crops show farm incomes will remain weaker over the next 12 months.
The outlook for corn contains a bin-busting national average yield, another 15-billion bushel crop, and usage that continues to churn through a lot of corn (just not enough to keep up with production). After a few years of drought-impacted crops, this year’s corn crop showed what a little additional water would do for production. The October estimate for the national average corn yield is a whopping 6.5 bushels above the previous record set last year, soaring well above 180 bushels per acre for the first time. Eight states are projected to have record corn yields, including Iowa and Illinois. While the Southeast and far eastern side of the Corn Belt are capturing smaller corn crops, the western and central Corn Belt has more than enough bushels to make up the difference. So as has been the case for the past several years, the corn market will have lots of kernels to feed and fuel users
Corn usage has also set records over the past couple of years, but those records are still below 15 billion bushels. Feed and residual use increased by over 300 million bushels last year and is expected to grow slightly in the coming year, as heifers continue to stream into feedlots, swine herds continue to translate into record pork production, and the broiler, turkey, and layer flocks rebuild. Fuel use also increased last year by nearly 300 million bushels and is projected to be steady this year, as the ethanol industry has returned to pre-COVID levels of production. But there are a couple of sectors where corn usage has slipped. Corn sweetener use has declined within the past five years, down roughly 50 million bushels since 2020. Consumer shifts in beverage choices, mostly a decline in soda consumption, have driven this change. But the largest shift remains in the export sector. The 2020 marketing year set the record for corn export sales (in bushels), pushed by the COVID recovery surge and the Phase One trade deal with China. Corn exports dropped after that, as rising corn prices, the slowdown after the surge, and the completion of the trade deal limited U.S. competitiveness in global markets. The largest drop came in 2022, as corn exports had fallen by over a billion bushels from the record two years earlier. The drop in corn prices over the past 18 months has translated into more international sales recently, with exports up over 600 million bushels last year. And as with feed use, USDA’s projections display slight growth over the coming year. The issue is that is still 400 million bushels below sales from 2020.
With production exceeding the record usage, corn stocks have been building. For most of this calendar year, the projections for corn stocks at the end of the 2024 marketing year (so Aug. 31, 2025) have exceeded 2 billion bushels, which is a healthy 240 million bushels above corn stocks for the 2023 marketing year and 640 million bushels above stock levels in 2022. The most recent update lowered the stock estimate to 1.999 billion bushels, showing usage slowly trying to catch up to production. But as stocks have grown, prices have fallen. The season-average price for corn was $6.54 per bushel for the 2022 crop. That dropped to $4.55 per bushel for 2023. And the current projection is $4.10 per bushel for 2024. Current corn futures roughly agree with that outlook, with the futures at the end of the WASDE report day signaling a $4.15 per bushel price. The corn futures prices for the 2025 corn crop are revealing slightly better news for next year, as prices are projected to slowly increase. The current futures-based season-average price estimate for the 2025 crop is $4.46 per bushel.
The combination of a surge in soybean planting this spring and the temporary removal of drought through most of the growing season has led to record projections for both the national average soybean yield and soybean production. The current yield estimate is 53.1 bushels per acre, besting the record from 2021 of 51.7 bushels per acre. The previous soybean production record also comes from 2021 at 4.464 billion bushels. The 2024 estimate is 4.582 billion bushels, so there’s a lot of beans for the markets to work with this fall. As with corn yields, the record soybean yields are mainly driven by production in the western and central Corn Belt, with lower yields in the Southeast and eastern Corn Belt.
And while corn is capturing record usage, soybean usage is rebounding, but has not quite reached prior levels. The major growth area has been domestic crush, mainly for renewable diesel development. Given USDA’s current estimates, crush will consume over 200 million more bushels this year than it did in 2022. In fact, soybean crush has been consistently growing over the past four years. The challenge, however, is that growth has not been enough to offset the declines in soybean exports over the past several years. Like corn, soybean exports set their record in 2020. The same factors (higher prices, post-surge slowdown, and completion of Phase One) led to lower exports in 2021, 2022, and 2023. The cumulative drop is roughly 600 million bushels. While 2024 looks like a better export year, the projection leaves soybean exports at 1.85 billion bushels, over 400 million bushels below the 2020 record.
Thus, soybean stocks are building as well. The 2024 ending stocks estimate is 550 million bushels, more than double the stock level from 2022. And again, as stocks have grown, prices have fallen. The season-average price for soybeans was $14.20 per bushel for the 2022 crop. That dropped to $12.40 per bushel for 2023. And the current projection is $10.80 per bushel for 2024. Current soybean futures aren’t in alignment with that outlook. The market is more pessimistic for soybeans. Futures prices at the end of the WASDE report day signaling a $9.80 per bushel price, a full dollar below the USDA estimate. My sense of the reasoning behind this difference is due to concerns about the growth in global soybean production and the ability of the U.S. to gain back export market share. The soybean futures prices for the 2025 soybean crop are revealing slightly better news for next year, as prices are projected to slowly increase. The current futures-based season-average price estimate for the 2025 crop is $10.20 per bushel.
Listen to the latest Market Outlook video for further insight on outlook for this month.
Chad E. Hart, extension economist, 515-294-9911, chart@iastate.edu
