Bearish USDA estimates alter marketing plans

By RHIANNON BRANCH
FarmWeek

Marion County Farm Bureau President Steve Brummel checks grain markets on his phone as he reevaluates his marketing plan. (Photo by Rhiannon Branch of FarmWeek)

USDA’s January crop production estimates cast a long shadow over the grain markets. Bearish news of a 17-billion-bushel U.S. corn crop sent shockwaves through the markets since Jan. 12 and threw a wrench in many farmers’ marketing plans to start the year.

Marion County Farm Bureau President Steve Brummel said he was expecting a status quo report but instead got a 25-cent drop in soybean markets while also seeing a basis hit due in part to low water levels on the Mississippi River.

“I’m kind of rethinking where I’m going to start selling crop at,” Brummel told FarmWeek. “I’m now looking at the February-March time frame to start moving grain so I can finish paying last year’s operating note before spring because I think the planting intentions report will be a big factor at the end of March.”

Mason County Farm Bureau President Matt Sandidge stopped grain deliveries after the report came out and had to reevaluate the loads they were spotting in the market.

“Normally I don’t ever spot, but usually the market gives you an opportunity to make money and there wasn’t very many of those this year,” Sandidge told FarmWeek. “What the market took was kind of everything that you got out of your (USDA) bridge payment. So that was a shock to the system.”

But, basis is still strong in his area, which confirms there weren’t a record number of bushels locally.

“Maybe we’re in different times, but to print a record yield and not have central Illinois and northwest Iowa be record is kind of unheard of. I don’t think anybody’s ever seen that before or expected it to happen,” Sandidge said.

Raelynn Parmely, economic and policy analyst for Illinois Farm Bureau, said lower yields in Illinois made it harder to understand the national estimates.

“Illinois farmers are right to look in their own backyards and say their production maybe wasn’t as high as predicted. But this is a nationwide estimate and there were many states that did actually see record production,” Parmely told FarmWeek, noting timing of the report also played a big role in the market reaction.

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“These are considered some of the end-of-year estimates, so frankly, in any given year when there’s higher than expected crop, that report will likely trigger that type of response,” she said. “Typically, with these reports we see an immediate price decrease, but it’s started to trickle back up for corn and for soybeans. Ultimately, the market decides what it wants to pay for grain, regardless of what USDA predicts.”

Brad Summa, regional director for USDA’s National Agricultural Statistics Service, said about 73,000 farmer surveys were considered for the January estimates, and the government shutdown last fall did not impact the methodology of the report.

“You’re comparing apples to apples in terms of the 2025 end-of-year estimates compared to the ‘24 end-of-year estimates in terms of the processes that went into that,” Summa told FarmWeek.

Planted acreage was confirmed by certified acres through the Farm Service Agency and harvested acres were estimated from the quarterly agricultural survey done by farmers in December to determine the harvested-to-planted ratio.

Summa said a big factor in 2025 was that good harvest weather led to minimal abandonment of the corn crop.

“The bottom line is because of the significant increase in planted acreage, a minimal amount of abandonment and a steady amount of silage, we had a higher harvested-to-planted ratio than normal, which led to the increase in harvested acreage that came out in that report,” Summa said.

While USDA does use some satellite imagery and has representatives physically looking in fields to help with crop estimates throughout the year, Summa said farmer surveys drive the final numbers.

“At the end of the day it is farmers who determine if that crop gets harvested for grain or not and that’s why that end-of-year survey is so very important,” Summa said. “If farmers want to help us ensure that accuracy is at its highest level, then please help us by responding when we contact you.”

The response to the report can be a good reminder of the importance of continually exploring risk management options, including evaluating whether inputs can be reduced with tools like Maximum Return to Nitrogen (MRTN), as well as looking at loss protection and forward contracting options.

Parmely said the situation also brings to light the importance of some policies that farm groups are working toward, like year-round E15.

“When we have an abundant crop, having domestic uses for that crop is a great way to have a little bit more price control,” she said. “This also points to the need for continued market development and trade deals. If we have places for our crops to be delivered, that also helps drive up demand, which can help settle some of those prices,” Parmely said.

This story was distributed through a cooperative project between Illinois Farm Bureau and the Illinois Press Association. For more food and farming news, visit FarmWeekNow.com.