Too much corn with nowhere to go as U.S. sees record crop

The ripening corn and soybean fields stretch for miles in every direction from Dennis Wentworth’s farm in Downs, Illinois. As he marveled at his best-yielding crops ever, he wondered aloud where the heck he’ll put it all.

“Logistics are going to be a huge problem for everyone,” the 62-year-old grower said, adding that he has invested in boosting output rather than grain bins. When harvesting starts in a few weeks, Wentworth expects his 150-year-old family farm to produce 10 percent more than last year’s record. “There are going to be some big piles of grain on the ground this fall.”

From Ohio to Nebraska, thousands of field inspections last week during the Pro Farmer Midwest Crop Tour show corn output in the U.S., the world’s top producer, will be 0.4 percent above the government’s estimate. Months of timely rains and mild weather created ideal growing conditions, leaving ears with more kernels than normal on 10-foot (3-meter) corn stalks and more seed pods on dark, green soy plants.

Prospects of bumper harvests sent Chicago futures tumbling into bear markets last month, two years after a drought eroded output and sparked the highest prices ever. Cheaper grain is bolstering profit for buyers including Tyson Foods Inc., encouraging some cattle producers in the Great Plains to expand herds, and eroding income for farmers who say increased output will make up for some of the slump.

Corn on the Chicago Board of Trade has tumbled 20 percent since the end of May, closing at $3.715 a bushel Friday, and soybeans are down 30 percent to $10.42 a bushel. The Bloomberg Commodity Index slid 6.3 percent over the same period, while the MSCI All-Country World Index of equities rose 1.7 percent. The Bloomberg Treasury Index gained about 0.6 percent.

Surging crop supplies may exacerbate the squeeze on grain storage and shipping. BNSF Railway Co., owned by Warren Buffet’s Berkshire Hathaway Inc, and Canadian Pacific Railway Ltd. struggled with “greater-than normal” demand from shippers of coal, oil and Midwest crops, the USDA said this month in a report.

Combined with inventories left from the 2013 harvest, production of all grains and oilseeds will boost 2014 supply to 26.97 billion bushels, USDA data show. That’s more than the 23.4 billion of storage on farms and grain-company silos as of Dec. 1, the government estimated in a Jan. 10 report.