Driving through Redwood County, it is easy to see this year was a bumper growing season for corn. Grain elevators, hard up for space, are piling record amounts of corn on the ground, but the phenomenon isn’t local.
The numbers coming out the USDA are astounding and show a statewide and nationwide record-breaking growing season for both corn and soybeans.
While on the surface this seems to be a favorable turn of events, the prices tell a different story, and the numbers speak for themselves.

Corn
Based on the latest information from the USDA, Minnesota is projected to have a record 2016 corn yield of 190 bushels per acre, which compares to the previous record yield in 2015 of 188 bushels per acre, 156 bushels per acre in 2014 and 160 bushels per acre in 2013.
The USDA is also estimating a record corn yield in Iowa this year at 199 bushels per acre, which compares to the previous record yield of 192 bushels per acre in 2015, 178 bushels per acre in 2014 and 165 bushels per acre in 2013. Illinois is the big winner in the corn numbers game as it is projected to have a record 2016 corn yield of 202 bushels per acre, compared to 175 bushels per acre in 2015.
As the harvest wore on, the USDA eventually increased the corn production numbers by 169 million bushels over its October estimate, while 2016 soybean production was increased by 92 million bushels compared to just one month earlier.
The USDA is estimating record U.S. corn and soybean yields in 2016, as well as record yields in several states, including Minnesota, Iowa and Indiana.
The latest USDA report estimates the total U.S. corn production for 2016 at a new record level of more than 15 billion bushels.
This far exceeds U.S corn production levels of 13.6 billion bushels in 2015, the previous record level of 14.2 billion bushels in 2014 and 13.8 billion bushels in 2013. This year’s harvest blows the 2012 harvest out of the water, which was only 10.8 billion bushels, but there was a severe drought that year.
According to information from the USDA, it is now estimating the 2016 national average corn yield at 175.3 bushels per acre, which is an increase of 1.9 bushels from the earlier October yield estimate. The 2016 corn yield estimate exceeds the former record U.S. corn yield of 171 bushels per acre in 2014. The numbers remain higher, too, in comparison to U.S. corn yields of 168.4 bushels per acre in 2015, 158.1 bushels per acre in 2013 and the low end of 122.3 bushels per acre in the 2012 drought.

Soybeans
The November report from the USDA is fairly significant on the soybean front, as well.
It is estimated that the total 2016 U.S. soybean production will come in at a record level of 4.36 billion bushels, blowing by the preceding record production of  3.93 billion bushels in both 2015 and 2014. This year’s numbers, again, exceed U.S. soybean production levels of 3.36 billion bushels in 2013, and 3.03 billion bushels in 2012.
The USDA is putting its estimate for the 2016  soybean growing season in Minnesota at a record level of 52 bushels per acre, surpassing the previous record yield of 50 bushels per acre in 2015 and far exceeding the 2014 yield of 41.5 bushels per acre.
The 2016 Iowa soybean yield is estimated even higher at a record-breaking level of 59 bushels per acre, compared to the previous record of 56.5 bushels per acre in 2015. Other projected soybean yields for 2016 are Illinois coming in at 62 bushels per acre, Indiana at 59 bushels per acre and Nebraska at 62 bushels per acre – all well above 2015 numbers.

Prices
At its current estimate, the USDA is projecting the U.S average cash corn price for 2016-17 to fall somewhere between $3-3.60 per bushel.
Doing the basic math, that puts the average at $3.30 per bushel, which is an increase of five cents per bushel from the October estimated average price.
The USDA is putting the price range for the 2016-17 soybean harvest anywhere from $8.45-9.95 per bushel.
This will put the average soybean price at $9.20 per bushel, up 15 cents per bushel from the October estimate.

What the numbers mean
“I think if you ask around, you’ll find this year isn’t going to cash-flow very well,” said Kevin Beekman, county executive director for the Renville and Redwood counties Farm Service Agency. “You need to remember, too, that the prices put out (by the USDA) are for the ports, like Chicago. There is still a base in there for the local producer. If its (corn prices) $3.60 in Chicago, it’ll be more like $3.20 to $3.10 here.”
Beekman said regardless of which numbers you look at, Chicago’s or the local corn prices, it’s going to be tough for producers.
“It wasn’t so long ago we thought $3.25 was a good price for corn, and $8 to $9 was a good price for beans,” Beekman added, “but, what has happened with that since 2008 is that the prices have kept climbing up.
“Now that we need the other prices – the input costs – to go the other way, those prices aren’t coming down with the price of the grain.”
Beekman said there are a lot of farmers looking forward and wondering how they are going to get through the downturn in prices for their commodities.
“Some serious financial decisions are going to need to be made by all operators this coming year,” Beekman said. “When you get a yield like we’ve got this year, and there is such an abundance of it, it reminds us the markets are still run on supply and demand, and we have a lot of supply on hand right now.”
Beekman said the export market will be key, if prices are to increase at all.
He said it is necessary for foreign markets to continue to buy U.S. commodities.
The Nation Agricultural Statistics Service (NASS) has indicated an increase in soybean sales to China and increased corn sales to South Korea; however, they aren’t enough to deal with the current surplus of grain in the U.S.
“If prices don’t go up for operators, we could be in for a couple of tough years,” Beekman said. “You don’t have to be an economics professor to figure that out.”