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AFM NEWS

Southeast Harvest Season: Impact, Pricing, and Future Projections

2024/09/16
Commoditycrops

As the harvesting season approaches in the Southeast, it's crucial to focus on the key commodity crops: corn, wheat, and soybeans. These crops, often cultivated in large quantities, play a vital role in our food systems and economy. This article delves into the fundamentals of these crops, the harvest schedule and pricing in the Southeast, and projections for the future.

Commodity crops, while often less nutrient-dense and flavorful compared to other varieties, are essential due to their significant industrial and economic roles:

1. Global Food Security: These crops are fundamental to human and livestock diets. For instance, wheat is processed into flour, and corn is turned into artificial sweeteners or processed into feed for poultry, hogs, and cattle. They form the backbone of many processed foods available in supermarkets and contribute to global food security through exports. The U.S. exports substantial portions of these crops: wheat (46%), soybeans (50%), and corn (21%).

2. Economic Impact: Commodity crops generate substantial revenue through exports and domestic sales, supporting millions of jobs in farming, transportation, and processing. In 2022, the agricultural and food sectors supported 22.1 million jobs, accounting for 10.4% of total U.S. employment, according to the USDA. Direct on-farm employment made up about 2.6 million of these jobs or 1.2% of U.S. employment. The USDA also reports that agriculture, food, and related industries contributed approximately $1.530 trillion to U.S. GDP in 2023, with farms contributing $203.5 billion—around 0.7% of the GDP.

3. Industrial Applications: Corn and soybeans are also critical for industrial uses. Today, about 40% of the U.S. corn crop is processed into ethanol for biofuels, and soybeans are processed into biofuels and industrial oils. This is a stark contrast compared to a few decades ago when the number was virtually zero.

Next, let's consider the harvest schedule and pricing in the Southeast for each commodity crop.

Corn

Planting: March to May

Harvesting: August to October

Pricing Statistics and Projections: In 2022/2023, the U.S. planted 88.2 million acres of corn, and the average bushel price was $6.54. In 2024, 91.5 million acres were planted and will yield a price of $3.8125 per bushel, according to September 2024 projections.

Soybeans

Planting: March to July

Harvesting: September to October

Pricing Statistics and Projections: 87.5 million acres of soybeans were planted, with a price of $14.20 per bushel in 2022/2023. Prices are estimated at $10.12 per bushel in August 2024 projections.

Wheat

Planting: October to December

Harvesting: May to July

Pricing Statistics and Projections: In 2022/2023, 45.8 million acres of wheat were planted, with a price of $8.83 per bushel. In September 2024, projections estimate that 47.2 million acres were planted and will yield a price of $5.37 per bushel.

Commodity crops like wheat, soybeans, and corn are integral to many food products and household items. They play a crucial role in food security, the economy, and industrial applications. While prices can fluctuate due to various factors such as weather patterns, geopolitical events, and market conditions, these crops remain a solid investment for farmers and agricultural investors alike.

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Frequently Asked Questions

  • The three key commodity crops in the Southeast are corn, soybeans, and wheat. Corn is planted from March to May and harvested from August to October. Soybeans are planted from March to July and harvested from September to October. Wheat follows a different cycle, being planted from October to December and harvested from May to July.

  • Commodity crops generate substantial revenue through both domestic sales and exports, supporting millions of jobs across farming, transportation, and processing. According to the USDA, agriculture, food, and related industries contributed approximately $1.530 trillion to U.S. GDP in 2023, with farms themselves contributing $203.5 billion, or around 0.7% of GDP. In 2022, the broader agricultural and food sectors supported 22.1 million jobs, accounting for 10.4% of total U.S. employment.

  • The United States exports a significant share of its commodity crop production. Soybeans lead at 50% exported, followed by wheat at 46%, and corn at 21%. These exports make U.S. commodity crops a critical contributor to global food security.

  • Based on projections available as of September 2024, corn is expected to yield approximately $3.81 per bushel, a notable decline from the $6.54 average seen in 2022/2023. Soybean prices are projected at around $10.12 per bushel, down from $14.20 per bushel in 2022/2023. Wheat is projected at $5.37 per bushel, compared to $8.83 per bushel in 2022/2023.

  • Corn and soybeans have significant industrial applications. Today, approximately 40% of the U.S. corn crop is processed into ethanol used for biofuels. Soybeans are similarly processed into biofuels and industrial oils. This industrial demand represents a major shift from just a few decades ago, when such uses were virtually nonexistent.

  • Commodity crop prices can vary due to a range of factors including weather patterns, geopolitical events, and broader market conditions. Despite this volatility, crops like wheat, soybeans, and corn remain a solid investment for farmers and agricultural investors because of their essential roles in food security, the broader economy, and growing industrial applications such as biofuels.