USDA projected Tuesday that farmers will produce a record 16.7 billion bushels of corn this fall and sharply lowered its forecast for the average corn price, which if realized could trigger significantly higher commodity program payments.
In its first forecast of the season based on a survey of farms, USDA estimated the average corn yield this year at a record 188.8 bushels per acre, an increase of 9.5 bushels over last year’s crop.
In its monthly World Agricultural Supply and Demand Estimates, USDA estimated ending stocks would rise 457 million bushels to 2.1 billion, which would be the largest amount since the 2018-2019 marketing year.
The department lowered the estimated season-average price for this year’s crop by 30 cents to $3.90 per bushel. A decrease of that size could increase commodity program payments by as much as $3.6 billion, according to an analysis by ag accountant Paul Neiffer.
Under the budget reconciliation law enacted in July, USDA will pay farmers the higher of the Price Loss Coverage or Agriculture Risk Coverage program this year, regardless of which program they signed up for.
"For every 10 cent drop in [marketing year average] corn price, farmers on average will receive an extra $1.2 billion in payments. Some farmers will max out on the payment limits so the final number might be less," Neiffer said in a note to subscribers.
Arlan Suderman, chief commodities economist for the StoneX Group, noted in an X post that revenue insurance indemnities also could increase this year “if low prices hold through October.”
The average price for the 2024 crop is estimated at $4.30 per bushel.
The CME price of corn for December delivery fell about 15 cents in early afternoon trading to under $3.97 a bushel after the reports were released.
The Renewable Fuels Association said the projection of a bumper corn crop underscored a need to increase ethanol demand.
“Alarm bells are ringing across rural America following today’s USDA report, and they should be ringing in the halls of Congress,” RFA President and CEO Geoff Cooper said in a statement.
“Our nation’s farmers are doing their job—they are sustainably and efficiently producing the largest corn crop in history. But antiquated policies and regulations—like the summertime prohibition on E15, outdated pump labeling obligations, and needless equipment certification requirements—are stifling demand and failing America’s farmers.”
USDA raised its estimate of ethanol usage for the 2025-26 marketing year by 100 million bushels to 5.6 billion.
The department estimated that soybean production would be down 2% this year to 4.29 billion bushels, even though yields are expected to average a record 53.6 bushels per acre. Farmers are expected to harvest 80.1 million acres of soybeans, 7% fewer than in 2024.
USDA lowered its estimate for U.S. ending stocks for soybeans by 20 million bushels to 290 million.
U.S. ending stocks are forecast at 290 million bushels, down 20 million from last month.
Don’t miss a beat! It’s easy to sign up for a FREE month of Agri-Pulse news! For the latest on what’s happening in Washington, D.C. and around the country in agriculture, just click here.
The U.S. season-average soybean price for 2025/26 is forecast unchanged at $10.10 per bushel. The soybean meal price is forecast at $280 per short ton, down 10 dollars.
The department estimated this year’s cotton harvest at 13.2 million 480-pound bales, an 8% decline from 2024. Yields are expected to average 862 pounds per acre, which would be a drop of 24 pounds from 2024.
"The corn-soybean ratio has favored corn so, so heavily this year," Jacqui Holland, an economist at the American Soybean Association told Agri-Pulse on Tuesday. A return of U.S.-China trade frictions, Holland said, have been a big factor in growers' decisions to pivot to corn. The Chinese market accounts for more than half of all U.S. soybean exports.
"The trade uncertainty is real," Holland said. "And it's it's not confined to just China," she added. Trade tensions with the European Union, the second-largest buyer of U.S. soybeans, also weighed on planting decisions, Holland said.
These trade concerns are visible in the geographical distribution of where growers reduced their soybean acreage the most, Holland said. USDA's crop production report showed a steep reduction in Louisiana's soybean acreage of nearly 30%.
Louisiana's soybeans typically get loaded straight onto ships destined for export markets because of the state's proximity to the Gulf of Mexico and its early harvest. As a result, Holland said, the growers are particularly sensitive to trade concerns.
"That's going to be a really big part of why Louisiana specifically took such a big acreage hit," Holland said.
Agriculture Secretary Brooke Rollins said in an X post that the huge harvest expected this fall “further underscores the NEED for new trade deals and increased market access across the globe for American agriculture products!”
For more news, go to Agri-Pulse.com.
