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Your Pro Farmer newsletter is now available... The Pro Farmer Crop Tour is Aug. 19-22, our 32nd year. Because USDA no longer collects objective yield samples in August, this will be the industry’s first broad look at field data from across the Corn Belt. The objective of Crop Tour is to find a representative sample of yield potential across the seven Corn Belt states from the more than 1,600 samples each of corn and soybeans. Follow along with results throughout the week and compare this year’s data to years past. You can also scout your own fields using the Pro Farmer formulas. USDA’s August crop estimates, which were based on farmer surveys, FSA certified acreage and satellite imagery, featured record corn and soybean yields that would result in the third largest corn crop and a new high for soybean production. That swelled projected new-crop soybean ending stocks, but corn carryover declined from last month. Demand concerns tied to China’s economic struggles, ample global supplies and recent U.S. recession fears have eroded investor appetite for commodities, causing funds to amass a record net short position across the raw commodity sector. We cover all of this and much more in this week’s newsletter, which you can access here.
Time to hit the fields on Crop Tour. Scout your fields, too!... While we’re scouting fields across the Corn Belt Aug. 19-22 on the Pro Farmer Crop Tour, you can scout your own fields. That will allow you to compare your results to those we find in other areas of the Corn Belt.
Corn
In each corn field, get past the end rows and then take 35 paces into the field.
• At the 35th pace, lay out a 30-foot plot and count all the ears that will make grain on two 30-foot rows.
• From one of those two rows, pull the 5th, 8th and 11th ears. This gives us a consistently random process to select sample ears.
• Measure the length of grain (in inches, rounded to the nearest one-quarter inch) on each ear.
• Count the number of kernel rows around each ear.
• Record the row width in the field.
• To calculate the estimated yield, take the average number of ears in the two 30-foot rows TIMES the average length of grain per ear TIMES the average number of kernel rows around; DIVIDE the total by row width.
Example: (50 ears X 6.5 inches X 16.7 kernel rows) / 30-inch rows = 180.9. This example gives you an estimated yield at that spot in the field of 180.9 bu. per acre.
Soybeans
In each soybean field, pick a ‘representative spot’ in the field.
• Measure a three-foot section in one row and count all the plants in that plot. Randomly select three plants. Count all the pods on those three plants and calculate the average number of pods per plant.
• Multiply the average number of pods per plant by the number of plants in the three-foot plot. Multiply that number by 36, and divide by row width.
Example: (14 plants X 32 pods/plant X 36) / 15-inch rows = 1,075.2 pods in a 3’X3’ square.
Compare your results to what we find on Tour.
USDA provides funding to boost domestic biofuels... USDA Secretary Tom Vilsack announced funding for 160 projects across 26 states to expand clean energy systems and boost domestic biofuels. USDA is providing $99.6 million through the Higher Blends Infrastructure Incentive Program (HBIIP) and the Rural Energy for America Program (REAP), part of a broader effort to enhance American energy security and combat climate change.
These investments are aimed at improving infrastructure for renewable fuels and supporting clean energy projects, with over $600 million invested in 4,500 clean energy projects and more than $180 million in biofuel availability projects under the Inflation Reduction Act to date.
Vilsack made the announcement in Minnesota, where significant investments are being made in renewable energy, including $9.2 million in REAP grants for 71 projects. USDA is also awarding $90.3 million in HBIIP grants for infrastructure upgrades in 26 states.
Harris proposes ban on price gouging, cost controls... Kamala Harris outlined proposals to cut taxes for most Americans, ban “price gouging” by grocers and boost affordable housing on Friday in her first major economy-focused speech as the Democratic presidential nominee. She discussed an economic agenda for her first 100 days in office if she wins the election.
Harris plans to introduce a federal ban on price gouging in the food and grocery sectors, particularly targeting the meat processing industry, which she claims is highly consolidated and contributes to rising grocery prices. Harris has declined to detail what her administration would consider “excessive” price gouging and how they would go about targeting companies, appearing to leave much of those decisions to FTC discretion.
She also envisions new price controls on groceries, and expanding limits on out-of-pocket prescription drug prices to all Americans. Harris says she would push the government to negotiate additional drug savings faster, and cap the monthly cost of insulin at $35 for all Americans.
Of note: Harris’ price-gouging initiatives are unlikely to pass in Congress due to insufficient support. Her plan mirrors stalled legislation from Democratic Sens. Elizabeth Warren (D-Mass.), Bob Casey (D-Pa.) and Tammy Baldwin (D-Wis.), which has faced strong opposition from Republicans.
The meat industry has strongly rejected Harris’ pointing to meat prices at the center of food inflation. “It’s time for this administration to stop using the meat and poultry industry as a scapegoat and a distraction for the root causes of inflation and the significant challenges facing our economy,” National Chicken Council Interim President Gary Kushner said in a statement.
The Meat Institute said, “Consumers have been impacted by high prices due to inflation on everything from services to rent to automobiles, not just at the grocery store. A federal ban on price gouging does not address the real causes of inflation. The Harris campaign rhetoric unfairly targets the meat and poultry industry and does not match the facts. Food prices continue to come down from the highs of the pandemic. Prices for meat are based on supply and demand. Avian Influenza, a shortage of beef cattle and high input prices like energy and labor are all factors that determine prices at the meat case. Prices that livestock producers receive for their animals are also heavily influenced by supply and demand. Prices for cattle producers especially are at record highs, surpassing the 2014-2015 previous record highs. Today, well into 2024, cattle prices remain at record levels because the US has the lowest cattle inventory since Harry Truman was President.”
While food price controls can offer short-term benefits in specific situations, such as during acute supply disruptions, they are generally seen as economically unsound in the long term. They tend to create more problems than they solve by distorting market mechanisms and leading to shortages. Most economists recommend targeted income support and structural economic policies as more effective alternatives for addressing food price inflation.
U.S. consumer sentiment rises in August... The University of Michigan’s Index of Consumer Sentiment increased 1.4 points (2.1%) in August to a preliminary reading of 67.8. That would still be down 1.6 points (2.3%) from last year. The Current Economic Conditions index declined 1.8 points (2.9%) from last month to 60.9, a sharp 14.6 points (19.3%) below August 2023. The Index of Consumer Expectations rose 3.3 points (4.8%) to 72.1, up 6.7 points (10.2%) from last year.
Surveys of Consumers Director Joanne Hsu said, “With election developments dominating headlines this month, sentiment for Democrats climbed 6% in the wake of Harris replacing Biden as the Democratic nominee for president. For Republicans, sentiment moved in the opposite direction, falling 5% this month. Sentiment of Independents, who remain in the middle, rose 3%. The survey shows that 41% of consumers believe that Harris is the better candidate for the economy, while 38% chose Trump. In comparison, between May and July, Trump had a 5 point advantage over Biden on the economy. Overall, expectations strengthened for both personal finances and the five-year economic outlook, which reached its highest reading in four months, consistent with the fact that election developments can influence future expectations but are unlikely to alter current assessments. Survey responses generally incorporate who, at the moment, consumers expect the next president will be. Some consumers note that if their election expectations do not come to pass, their expected trajectory of the economy would be entirely different. Hence, consumer expectations are subject to change as the presidential campaign comes into greater focus, even as consumers expect that inflation-still their top concern-will continue stabilizing.”
Year-ahead inflation expectations came in at 2.9% for the second straight month. Long-run inflation expectations came in at 3.0%, unchanged from that last five months.