Washington Farmers will harvest bin-busting crops of corn, soybeans, rice and other crops despite the drought and heat that have plagued parts of the country this summer, the Agriculture Department said today.
USDA said it expects a modest increase in prices for some commodities 20 cents a bushel for soybeans and 5 cents a bushel for corn because of tightening world supplies or rising exports.
The higher prices could save the government as much as $1 billion in crop subsidies, but many farmers still wouldn't recover their cost of production, so the rosier projections are unlikely to slow a drive in Congress to pass a major bailout of the agricultural economy. The Senate last week approved a $7.4 billion package of farm assistance; the House has yet to act.
''I don't see much of anything that would change our net farm income,'' said USDA economist Larry Salathe.
The biggest impact of the drought could be on dairy farmers. Milk prices are expected to rise as much as 50 cents per hundred pounds because of strong demand for cheese and declining production in the parched Northeast.
Soybean production is forecast at a record high 2.9 billion bushels, up 4 percent from last year, although the drought has ruined crops from Ohio through the mid-Atlantic states.
Most of the nation's heartland has received plenty of rain this summer and a Midwest heat wave eased in time to spare most crops.
The corn harvest is expected to be the third largest on record at 9.6 billion bushels.
USDA said it expected the average price of corn to range from $1.70 to $2.10 this year. Soybean prices should average $4.10 to $4.90 per bushel.
Wheat production is down 9 percent, as many farmers switched to other crops they thought would be more lucrative this year. But world wheat stocks are rising because of a big crop in China this year, so USDA doesn't expect prices to increase.