- The U.S. Department of Agriculture is anticipating record corn and soybean harvests this year — 15.2 bushels of corn and 4.1 billion bushels of soybeans.
- Analysts say the glut of crops is a result of farmers planting more to make up for a three-year income slump.
- Commodity prices have been somewhat wobbly on the market, but have seemed to modestly grow.
It's a difficult time for farmers across the board. Incomes have been falling, and the USDA projects that they will tally at $54.8 billion this year, the lowest since 2002. Large supplies of grains and milk are responsible for the drop. Farmers are getting an estimated 20% less for their milk than last year, and 40% less than in 2014. And the large supply of commodities and the lower value placed on them are also making the value of farmland itself drop.
Despite the record-high yields, analysts are still seeing corn futures growing. However, this likely hinges on the low value of corn to begin with, as well as overseas demand. Another trader said that many were skeptical of the large size of the crop.
Since corn is mostly used as livestock feed, large volumes could help stoke the country's demand for meat. A recent Rabobank report said that U.S. meat consumption increased by almost 5% in 2015. However, the demand will not continue to rise. The report expects consumption to taper off through 2018, which may result in an oversupply of yet another farming product.
Corn is also used in a variety of other food products, including starch, sweeteners and oil. However, use of many of those products is also waning. There is a push from consumers for manufacturers to stop using high-fructose corn syrup, which has been used throughout the food industry in products from soft drinks to ketchup.