Iowa's Agricultural Situation: USDA’s year-end summaries show livestock contraction and unexpected increases in crop production
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The Center for Agricultural and Rural Development (CARD) conducts innovative public policy and economic research on agricultural, environmental, and food issues. CARD uniquely combines academic excellence with engagement and anticipatory thinking to inform and benefit society.
CARD researchers develop and apply economic theory, quantitative methods, and interdisciplinary approaches to create relevant knowledge. Communication efforts target state and federal policymakers; the research community; agricultural, food, and environmental groups; individual decision-makers; and international audiences.
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The start of a new year brings summaries of the 2002 agricultural year. These summaries have had a strong bearish impact on crop markets. Following the January 10 release of the USDA annual crop summary, soybean futures fell by 10¢ to 20¢ per bushel and corn futures fell 3¢ to 9¢. In both cases, though, the price drops have not been enough to revive loan deficiency payments. Prices remain 20¢ to 30¢ over county loan rates, a sharp contrast to this time last year when loan deficiency payments were positive for corn and over a dollar a bushel for soybeans. Even given the recent price drops, the state average corn price is 24¢ higher this year, at $2.15 per bushel. The state average soybean price is $1.30 higher at $5.45 per bushel. The market’s recent downturn was driven by the surprising increases seen in the USDA’s production estimates for 2002 corn and soybeans.