Production Estimates Cause “Double Take”

“You had to do a double take. Not only did they come in high, they came in higher than the highest level of any analyst expectations.” Such was Tyler Schau’s, with AgMarket.Net, take on the latest USDA corn production estimates. The USDA National Agricultural Statistics Service (NASS) surprised nearly everyone forecasting a record U.S. corn crop of 16.7 billion bushels, up 13% from last year, with a record average yield of 188.8 bushels per acre. Expectations were for a larger crop, but not at the forecast level. According to a Kansas State University agricultural economist, the bump in forecast was the biggest one-month change since 1988, nearly 40 years ago. In response to the forecast, the USDA Economic Research Service reduced the average farm price for corn in its supply and demand estimates for the 2025/26 market year to $3.90 per bushel, down $0.30 from the previous forecast and $0.40 from the current market year.

U.S. soybean production was pegged at 4.29 billion bushels, down 2% from last year. Yields are expected to average a record 53.6 bushels per acre, up 2.9 bushels. The average soybean price was pegged at $10.10 per bushel, the same as the previous forecast and $0.10 higher than the current market year.

The forecast for Nebraska’s corn crop, if realized, would also be a record at 1.931 billion. The previous record was 1.855 billion bushels set in 2021. The average yield is forecast to be 192 bushels per acre, up from last year’s average of 188 bushels but less than the record 194 bushels also set in 2021. Soybean production is projected at 270.8 million bushels, down 10% due to fewer soybean acres compared to last year and slightly lower yields, 57 bushels per acre compared to 57.5 bushels. Production for other Nebraska spring crops is also forecast to be less this year: dry edible beans, down 14%; sugar beets, down 1%; alfalfa hay, down 8%; and sorghum, down 9%. The one exception is the production of all other hay is forecast to be up 13% to 3 million tons.

Historically NASS August yield estimates for Nebraska are remarkably accurate. Figure 1 graphs August estimates of average corn yields (orange line) from 1980 to 2025 along with actual yields (blue line) through 2024. The grey line plots the differences between actual and estimated yields. A point on the grey line above zero indicates actual yield exceeded the estimate. August estimated yields exceeded actual yields on average by 0.87 bushels per acre over the period. The differences between actual and estimated yields averaged 0.84% of actual. The largest misses, in percentage terms, occurred in 1983 and 1993 when NASS overestimated yields by 16% (16 bushels) and 19% (20 bushels), respectively. Last year’s yield estimate overshot actual yield by 6 bushels, or 3.2%. Figure 2 shows the same information for soybeans. On average, NASS estimates were less than actual yields by 0.37 bushels. The biggest misses occurred in 1984 and 1983 when NASS underestimated yields by 27% (7.0 bushels) and 26% (7.5 percent), respectively. Last year’s estimate exceeded actual yields by 1.5 bushels, or 2.6%.

FIGURE 2: NEBRASKA AVERAGE CORN YIELDS, ACTUAL VS AUGUST ESTIMATE

Source: Rolling Prairie Economics graphic based on data from USDA National Agricultural Statistics Service

FIGURE 2: NEBRASKA AVERAGE SOYBEAN YIELDS, ACTUAL VS AUGUST ESTIMATE

Source: Rolling Prairie Economics graphic based on data from USDA National Agricultural Statistics Service

Corn and soybean futures prices reacted as one would expect following the release of the production forecasts. Corn prices fell while soybean prices rose. With the current forecasts, Nebraska corn producers stand to receive $220 million less in revenue for this year’s corn crop compared with last year while revenues for soybeans could be off $278 million. Corn and soybean revenues combined typically account for 90% of the state’s crop revenues. With production costs sticky and the decline in revenue, positive returns this year will be problematic. Perhaps Nebraska agriculture can take comfort from the fact that, according to Katie Dehlinger of DTN, the company’s yield models estimate Phelps County will have the top average county corn yield in the country of 228.9 bushels per acre.