000841 USDA: Farmers To Have Record Crop

Washington - Timely rains and ideal temperatures across America's heartland are making for the biggest crops of corn and soybeans in history, the government said.

U.S. corn production will reach 10.4 billion bushels, up 10% from last year and 6% from 1998, according to the Agriculture Department's monthly survey of crop conditions. The record is 10.05 million bushels in 1994.

Consumers are unlikely to see much effect; the price of processed food and meat is not greatly affected by fluctuations in the cost of raw ingredients and animal feed.

The average yield also is expected to be a record at 141.9 bushels an acre, an increase of more than eight bushels from last year.

“Just about every kernel we planted grew,” said Dave Nelson, who farms near Belmond, Iowa.

“We had an excellent winter, an excellent spring, where we got all the crops planted very timely ... and we got some nice rains in June and another big shot in July,” he said.

Farmers are expected to harvest 2.99 billion bushels of soybeans this year, a 13% increase from 1999 and 9% above 1998's record crop. Yields this year are expected to average 40.7 bushels per acre, which would be the second highest on record.

Corn and soybeans, which are used for both food and animal feed, are the nation's biggest crops.

“These are massive crops,” said Bill Biedermann, a commodities analyst with Allendale Inc. Due to the bumper crops and hefty government subsidies, “there are going to be a lot of happy farmers” despite relatively low market prices, he said.

A large section of the western Corn Belt was gripped in drought this spring, but the rain came in time to salvage crops.

Iowa is expected to produce 1.86 billion bushels of corn this year, up from 1.76 billion bushels last year. No. 2 Illinois is expected to produce 1.75 billion bushels, up from 1.49 billion in 1999. Those yields will more than make up for Nebraska's smaller harvest, projected at 1.09 billion bushels, down from last year's 1.15 billion.

The bumper crops will serve to hold down the prices that farmers are paid, which remain well below support levels that trigger government subsidies.

“Back-to-back good yields both here and in South America have continued to keep pressure on prices,” said Gary Adams, a University of Missouri economist.

USDA estimated that the average price of corn this year will be $1.65 a bushel, down 5 cents from its projection in July. The estimated price for soybeans was lowered 5 cents from last month to $4.35 a bushel.

Corn for December delivery fell more than 2 cents to $1.87 a bushel at the Chicago Board of Trade Friday, while November soybeans rose 5 cents to $4.62 a bushel.

Other commodities also are having big years:

-Cotton production is forecast at 19.2 million bales, an increase of 13% from 1999 despite a lingering drought in parts of the South.

-Production of durum wheat, the type used to make pasta, is forecast at 115.2 million bushels, up from 99.3 million bushels in 1999. Production of other spring varieties is forecast at 553.7 million bushels, up from 503.1 million last year.

-Grape production is estimated at 7.4 million tons, up from 6.2 million in 1999. This year's apple crop is estimated at 10.7 million pounds, up from 10.6 million last year.

Nationwide, net farm income is expected to reach $46.1 billion this year, up 6% from last year, because of increased government payments and higher income from crops and livestock.

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