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Purdue: Prepare to Store a Big 2013 Crop

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Following the release of the USDA crop production numbers on Monday, a panel of Purdue agronomists and economists gathered to make recommendations for growers. Extension agronomists Bob Nielsen and Shawn Casteel said Indiana crops are set up to finish well and, with good weather and no early frost, will likely yield more than is currently being predicted by USDA. In Monday’s report, Indiana corn yields were estimated at 166 bpa a 68% increase over last year’s drought-shriveled crop. Soybean yields in Indiana are pegged at 50 bpa, up 6 bpa from 2012.  Nielsen said, during a briefing held at the State Fair, that the corn crop is several weeks behind schedule in development but should be able to reach full maturity before a killing frost. “Half of Indiana’s corn crop was planted after the 15th of May, which is the third latest in the last 10 years,” he said. “But we’ve learned that the planting date is not always a direct predictor of yield.”  He estimated combines would start rolling in Indiana by the late September.

Casteel said the soybean crop should mature about the same time as the corn crop which will force growers to choose which crop to harvest first. “Right now, soybean development is about a week behind, but we are set for good seed fill if we get the weather to finish it out,” Casteel said.

Economist Dr. Chris Hurt told HAT he was surprised that the USDA yield numbers were as low as they were.  He expects the yield and production numbers nationally will increase in future reports, “As we finish this crop, we are adding to these yield numbers. We have seen the lowest yield numbers barring an early frost.”  Hurt believes that over the next few months corn and soybean prices will move lower, “As yields and production numbers increase the carryover figures will also go up.” In its August report, the USDA forecast corn prices to average $4.90 and soybean prices to average $11.35.  This is a sharp decline from 2012 price levels, and Hurt said it will result in lower farm income for 2013.     As for marketing recommendations, Hurt says clean out the bins and plan to store this year’s crop, “If farmers do not have storage space, then they should sell on rallies; otherwise we should see good storage returns for corn.”  He added growers are very bullish and are not likely to sell at these lower prices, “They are going to cross their arms and say, ‘If you want my grain, come and get it’ and that will mean higher prices.”   “To say what a difference a year makes is a huge understatement. It’s a big difference this year,” said Jay Akridge, Glenn W. Sample Dean of Purdue Agriculture. Akridge, who moderated the panel, noted in his opening remarks that the report “sets up potential for a huge crop.”  “We have a lot more grain this year, which will get much of the industry back to work,” Hurt said. “The much bigger crop has producers and agronomists smiling, but the economists are not smiling. A larger crop means lower prices.”   While those lower prices could mean lower farm incomes, they also could offer some good news to food consumers. Prices of raw ingredients will be down, meaning retail food-price increases could moderate to less than the rate of inflation, Hurt said. In addition ethanol processors will be able to buy corn at lower prices. Hurt said this will keep the price of ethanol lower than gasoline and may provide some relief for motorists at the pump.