Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, October 13, 1994 TAG: 9410140043
SECTION: BUSINESS PAGE: 8 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
The Agriculture Department on Wednesday forecast the corn harvest at 9.6 billion bushels and soybeans at 2.46 billion bushels. Nearly ideal weather throughout the Midwest caused both crops to mature early and stay hardy.
The bumper crops will knock down prices received by farmers, raising the prospect of higher government spending to maintain farm income.
But the bulging bins should have no major impact on consumer prices, because raw goods make up such a small part of retail prices. By keeping a lid on animal feed costs, the heavy harvest should hold down already-low meat prices, said Paul T. Prentice, president of Farm Sector Economics in Colorado Springs, Colo.
Despite the gloomy price picture, some growers are pleased at the bounty.
``It gives you a good feeling to know you've got a good crop out there,'' said Scott Durbin, who grows corn and soybeans on 750 acres near Owaneco in south-central Illinois. ``It may not be worth what you'd like for it to be, but at least by golly you're going to have a crop out there to harvest.''
Durbin was reporting some corn yields in excess of 200 bushels an acre and soybeans at 50 bushels or more.
Yields like that in a major growing state such as Illinois helped push the nation's forecast yields to a record 133.8 bushels of corn per acre and 40.5 bushels of soybeans.
In parts of the corn belt, some grain already was being piled on the ground because elevators are full to bursting, said Rod Gangwish, a Shelton, Neb., farmer and president of the National Corn Growers Association. `We're beginning to see piles start,'' he said. ``We will continue to see those piles get bigger.''
But the self-professed optimist says it's often better to have more to sell cheap than too little at a higher price.
Wednesday's report, based on Oct. 1 field conditions, was the second straight month that the department has raised its forecast. Harvest still is under way for both crops.
The previous record corn crop was 9.48 billion bushels in 1992. For soybeans, the record was 2.26 billion bushels in 1979.
The corn forecast is 345 million bushels, or 4 percent higher than last month, and 51 percent higher than last year's harvest of 6.34 billion bushels. The forecast soybean harvest is 6 percent above September's estimate and 32 percent above last year's crop of 1.87 billion bushels.
The department projected a 10 cent drop in the season-average price of corn, meaning it will run from $1.90 to $2.30 a bushel.
The soybean harvest should bring the season-average price this month down to $4.60 to $5.30 a bushel, the department said, noting that strong export demand will ease some of the downward pressure on prices.
The department also forecast a record high cotton harvest of 19.3 million bales. But orange production was forecast at 11.4 million tons, down 11 percent from last season.
Lower corn prices mean the government will pay farmers more to make up the difference between the market price and a target price of $2.75 a bushel.
Growers also will be taking out more government loans and storing their corn and soybean crops as collateral. Lower prices mean many producers will be able to repay less than they borrow.
``In terms of budget exposure, this could be another big year,'' said Gary Adams, agricultural economist at the Food and Agricultural Policy Research Institute at the University of Missouri in Columbia.
Government payments rose from $9.2 billion in 1992 to $13.4 billion in 1993, largely due to the record 1992 corn harvest. The payments show up in the year following the harvest.
Compared with 1992, the corn crop is expected to be higher quality and drier going into storage. That will mean lower costs to hold the grain as growers wait for better prices, probably in the spring.
But Ray L. Stewart, who harvested 3,500 acres this August in McGregor, Texas, doesn't take part in government programs and says he wants to sell grain overseas rather than store it on his property.
``Sit tight, cross my fingers, grit my teeth and hope for a miracle - that's about the only thing I can do,'' he said.
by CNB