UPDATE: Cool summer sets hopes for record harvest

A mild summer across much of the nation's heartland has provided optimum growing conditions for the nation's corn and soybean crops. Pair that with high-yield seeds and other new farming technologies, and the U.S. is looking at busting records come harvest time.

The U.S. Department of Agriculture already has predicted a record soybean crop of 3.8 billion bushels. And the corn crop, it said in July, would be large but not bigger than last year's record of 13.9 billion bushels. However, many market analysts and some farmers expect the USDA to revise expectations upward in a report based on field surveys that's due out Tuesday.

"Conditions look just fantastic across most of the country," Texas A&M University grain marketing economist Mark Welch said.

In a typical growing season, at least some corn-growing states would have experienced drought or other production problems. But the 18 states that grow 91 percent of the nation's corn have experienced nearly ideal conditions this year, as adequate rain fell when plants emerged and cooler summer temperatures minimized heat stress.

That's the case in Illinois, one of the nation's top corn and soybean states.

"Illinois has largely been dealt to date pretty close to a royal flush on weather and I'm sure that the yields are going to be very high here," said Scott Irwin, a University of Illinois professor of agricultural and consumer economics.

The expected large harvest has driven corn and soybean prices significantly lower, but it isn't expected to make much of a short-time difference in consumer food prices. However, since the grains are staples in livestock feed, lower prices could eventually lead to a decline in the cost of beef, pork, chicken and milk.

"Eventually the economics will feed through but I wouldn't expect much relief in 2015 yet. It just takes time to go through the systems," Irwin said.

Weather doesn't deserve all the credit for the amount of grain farmers are getting from each acre this year.

Agriculture companies have developed genetic characteristics in seeds that allow plants to be packed more densely per acre and arm them with resistance to drought, disease, and pests. In addition, larger planters and tractors equipped with GPS programs can run at night if needed, helping farmers adjust planting when weather delays field work.

"When conditions are right we have the ability to get in and get that crop established so much more quickly than we could in the past …" Welch said. "We're just creating an environment that when the weather cooperates we're capturing more of the potential and the possibilities genetically that are within that corn plant."

During the lifetime of the average U.S. farmer, who's 58, corn yields have more than tripled from a national average of 44 bushels per acre in the 1950s to nearly 150 bushels per acre in recent years.

Average corn yields set a record in 2009 with 164.7 bushels per acre. The USDA previously estimated 165.3 bushels per acre this year, and some analysts are speculating about exceeding 170 bushels per acre.

The record soybean yield also came in 2009, an average of 44 bushels per acre for a 3.36 billion-bushel harvest. The USDA expects a national average of 45.2 bushels per acre and a crop of 3.8 billion bushels this fall.

Wayne Humphries, who farms about 1,000 acres in southeast Iowa, recently attended a National Corn Growers conference in Washington. What's unusual about this year, he learned, is that farmers who irrigate dry areas of Nebraska and Texas didn't turn on the water until late last month — weeks later than normal.

"People were there from all over in corn-producing states and they said it just looks really good," he said.

The downside of a bumper crop is depressed prices for the farmers' haul, meaning they could break even or lose money.

The price for corn scheduled for December delivery, widely considered a benchmark, was $3.66 per bushel Friday. That's at least 50 cents a bushel below what most farmers spent on seed, fertilizer, pest- and weed-control chemicals and fuel. Some farmers will store grain and sell when prices improve, while others may use a portion of their federal crop insurance that kicks in when prices fall below certain thresholds.