Important Crop Insurance Information for Clients of Compeer Financial
FALL 2024
CROP TALK In this issue:
The Year Ahead: AN OUTLOOK ON YIELDS,
2 | Your Crop Insurance Documents are Available to You Digitally
by Cole Patrick, Director of Insurance Strategies
Online Renewals Holiday Office Closures 3 | Looking at ARC and PLC for 2025 4 | Weighing Livestock Insurance Coverage Options 5 | Sign up for Crop Insurance Text Notifications Track Your Profitability With Our Grain Margin Manager 6 | Carbon Credits Offer Economic Opportunities 7 | U.S. Agriculture Awaits Congress to Pass a New Farm Bill 8 | Crop Insurance Update Webinars
WEATHER, MARKETS AND RISK MANAGEMENT Yield Reports
The October U.S. Department of Agriculture (USDA) World Agricultural Supply and Demand Estimates (WASDE) report generally confirmed the summer projections on yields, raising the corn yield estimate for 2024 to 183.8 bushels per acre (bpa). If there is no change in the January 2025 report, this figure would beat the previous U.S. record-high corn yield by 6.5 bpa set in 2023 at 177.3 bpa. New records are expected in many cornproducing states, including Illinois, Iowa, Nebraska, South Dakota, Wisconsin, Michigan, New York and Louisiana. Illinois’ 2024 corn yield is estimated at 222 bpa versus the previous record of 214 bpa set in 2022. Iowa is pegged at 214 bpa versus 204 bpa set in 2021. Minnesota is pegged at 183 bpa and Wisconsin at 182 bpa. In somewhat of a surprise, the WASDE report did not show any stress to soybeans from a hot and dry September. The 2024 U.S. soybean crop is expected to yield 53.1 bpa, according to the report. This would be a new record for the U.S., beating the previous high of 51.9 bpa set in 2016. Illinois, Iowa, Missouri, Arkansas, Mississippi, Michigan, New York and Texas are expected to achieve record-high soybean yields. In summary, corn and soybean crops are both forecast to have a sizable ending stocks projection. Soybeans have a more bearish storyline because South America is projecting record acres planted.
Weather Impacts The latest projection is that La Niña has a 60% chance of emerging in September– November and is expected to persist through January–March 2025. If realized, that would be a very short La Niña period, as opposed to the previous one, which lasted parts of 2021–2023. Stay tuned because as markets become increasingly more global, a winter bounce in prices is possible if previous La Niña weather drought patterns emerge in the South American region. For the Midwest, the typical pattern of above-average precipitation in January–March would provide relief for the drought conditions that arose during late summer and continued throughout harvest. Meanwhile, on the farm, the uncertainties and volatilities from both the economic atmosphere and weather patterns are pinching down margins. From a macro perspective, factors such as commodity prices, inputs, land costs and interest rates are putting downward pressure on farm income. Supply and Income Levels Here’s what we’re looking at: With the expected U.S. record yields for corn and soybeans for the second year in a row, the stock-to-use ratio in the mid-teens would have an inverse relationship to price. In addition, the trade deficit is projected to stay in negative territory. A lot of grain is on the sidelines, and bins are filling up. In short, we have a domestic supply surplus. continued on page 5 >>