Grain farmers in Wisconsin and the rest of the country can say 2014 was one of the best years for growing corn, but they won’t get a financial reward because the increase in production most likely will keep prices from climbing, an agricultural economist said.
Corn for grain production in Wisconsin for 2014 has been estimated to reach 485 million bushels — a 10 percent jump from 2013 — and the yield is estimated at 156 bushels per acre — an 11 percent increase from 2013, according to the National Agricultural Statistics Service’s Crop Production 2014 Summary report.
Nationally, corn for grain production is expected to make a one-year jump of 3 percent to reach a record 14.2 billion bushels for 2014, and the yield has been estimated to reach a record high of 171 bushels per acre, the NASS report said.
The production increase is going to put more downward pressure on corn prices that bottomed out at below $4 per bushel last year before making a late-year rally, said Brian Gould, an agricultural economics professor at UW-Madison.
Prices may not drop if exports rise this year due to poorer production from competing countries like Argentina and Brazil, Gould said. But if those countries have bumper crops, there could be “significant downward pressure” on prices, Gould added.
Future prices for corn increased slightly Monday after the NASS report was released because the record production numbers nationally were actually less than what was expected. “But that was just a blip,” Gould said.
Corn storage numbers that help tell the supply story aren’t helping grain farmers, either.
Nationally, corn that is stored on and off farm sites totaled 11.2 billion bushels as of Dec. 1, 2014, which was an 11 percent increase from 2013, NASS reported Monday. In Wisconsin, corn storage reached 405 million bushels as of Dec. 1, 2014, a 20 percent jump from 2013, the report said.
“That’s all good news if you’re a user of corn, i.e. dairy farms,” said Gould.
State dairy farmers prospered in 2014 from record high milk prices and margins between milk and grain prices. Milk prices have since dropped and the margins have reached normal levels, but the low cost for grain to feed their cows will keep dairy farmers from feeling too much of a pinch in the wallet, Gould said.
Dairy farmers also have been buoyed by forecasts that milk prices will rise again later this year. “That could change, but they are expected to be at least relatively stable, and that’s good news for dairy farmers,” he said.