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Serving: IN

What Crop Report Means to Average Fairgoer

What Crop Report Means to Average Fairgoer
State director put sit in consumer terms.

When the USDA crop report was released last week, Joe Kelsay took a different take on it than most farmers. He's still heavily involved in a family diary operation, but he's also director of the Indiana State Department of Agriculture.

The report was for a 4% bigger national corn crop than a year ago, although a smaller crop in Indiana, and a smaller soybean crop. Chris Hurt, Purdue University Extension ag economist, figures that will turn out bullish in the long run for corn and soybean prices.

Kelsay notes that only 6% of those attending the Indiana State Fair, where a news conference on the crop report was held shortly after it was released, live on farms. That means 94% of the people who pass through the fair gates don't have a clear picture of what the crop report means, or why they should care, if they even know it exists.

"I would like them know that it is a tool farmers use to make decision on," he says. "We don't always make the right ones, but it helps decide such things as what we should plant next year.

"It also lets them know that Indiana farmers are having a tough year production-wise. We could end up with the worst of both worlds- low yields and low prices since crops are better elsewhere."

However, Hurt doesn't see that happening. He thinks stocks are low enough for both corn and soybeans to fetch record highs. In fact, he predicts strong farm income even for Indiana farmers for 2011, not due to yield but due to price. The segment of agriculture that might face a different picture are livestock producers. If corn gets above $7 per bushel, it may be difficult to turn a profit, he notes.

The report also gives some indirect indication of what might happen to food prices next year. They're likely to increase again to some degree, since commodity prices will stay high, Hurt notes.

The bottom line is that crop reports from USDA, considered an unbiased source are useful to farmers in planning, but they should also be useful to people who don't farm, Kelsays says. Those who don't farm but take time to follow and understand the crop commodity reports will have a better handle on several things, including where food prices are heading in the short term.

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