Farmers Reduce Acreage Under U.S. Program : Corn Yield Tops Forecast but Trails ’86

Overall, farmers have had good weather and record yields of corn as they wind up this fall’s harvest, the Agriculture Department said Monday.

Corn production was estimated at nearly 7.17 billion bushels, slightly more than forecast a month ago but still down 13% from the 1986 harvest of 8.25 billion bushels.

The department’s Agricultural and Statistics Board said an estimated 93% of this fall’s corn acreage was harvested as of Nov. 1, far ahead of the year-ago pace of 61%. Farmers cut back to about 59.6 million acres for harvest from 69.2 million acres a year ago.

A major reason for the acreage cutback was participation in government programs in which farmers agreed to idle part of their cropland in return for price supports and direct payments. In all, farmers signed up to take 54.4 million acres from crop production this year, including corn, wheat, rice and cotton.

In addition, farmers so far have agreed to idle almost 23 million acres of marginal, highly erodible land for 10 years.

Huge Inventories

Corn output this year is the smallest since 1983, when drought and government acreage programs reduced production to 4.18 billion bushels. The record output was 8.89 billion bushels in 1985.

But corn inventories will remain huge for at least the coming year, although some decline in the national stockpile is expected because of increased use, including larger shipments to overseas buyers.

“The U.S. average yield per acre is forecast at a record high 120.3 bushels, up 0.4 of a bushel from the Oct. 1 forecast,” the board said in its report. “The previous record was 119.3 bushels set in 1986. Record yields are forecast for Indiana, Minnesota and Nebraska.”

Officials said the “all crops” production index as of Nov. 1 averaged 107% of the base year of 1977, up a percentage point from October and just one point shy of the 1986 reading.

The index reached a record high of 117% in 1981 and 1982 before dropping to a decade low of 88% in 1983, when drought and government acreage cutbacks reduced production. It rose to 111% in 1984 and matched the record of 117% in 1985.

Soybean production was estimated at 1.96 billion bushels, down fractionally from the October forecast but 1% more than the 1986 harvest of 1.94 billion bushels. The record was 2.26 billion bushels in 1979.

Cash Income Up

The cotton harvest, based on Nov. 1 indications, was estimated at 13.9 million bales, up 4% from last month’s forecast and 43% more than the 1986 harvest of 9.73 million bales. The record was 18.95 million bales in 1937.

With the harvest of 1987 crops winding down, no new production figures were included for many earlier commodities such as wheat, oats and barley.

According to USDA economists, net cash income of farmers this year may be in the range of $54 billion to $58 billion, up from last year’s record of $52 billion. Net cash income is the difference between cash receipts and cash expenses.

Consumer food prices overall are expected to average about 4% higher this year, compared to a 3.2% gain in 1986. That would be the largest annual increase since 1982, when there was also a 4% increase. Even so, that is only about half of the yearly food price increases in 1980 and 1981.

In a related report, the USDA said corn prices at the farm may average $1.60 to $1.90 per bushel in the marketing year that began Sept. 1, compared to $1.50 in 1986-87. That forecast was unchanged from October.

The “supply and demand” report showed that the smaller 1987 corn harvest will not keep pace with expected usage of 7.73 billion bushels--an increase of 100 million bushels from October--in the coming year.

Thus, the total stockpile or corn carryover next Sept. 1 may decline to around 4.325 billion bushels from 4.882 billion bushels on hand this Sept. 1.