U.S. Crop Values Jump 6.4% to Record as Drought Spurs Prices

U.S. crop values rose 6.4 percent last year to a record as the worst drought since the 1930s pushed the price of corn and soybeans, the two most-valuable U.S. crops, to all-time highs.

The value of all crops was $225.7 billion, up from $212.1 billion in 2011, the U.S. Department of Agriculture said today in a report. Field crops including corn and soybeans jumped to $187.8 billion from $175.4 billion. Fruits and nuts rose to $25.9 billion from $24.2 billion, while commercial vegetable harvests were valued at $12.1 billion, down from $12.5 billion.

“If you were fortunate enough to get enough moisture to raise a crop, you had one of the best years you ever had, because you had high prices,” said Nathan Franzen, president of the agribusiness division of First Dakota National Bank in Yankton, South Dakota.

The drought, which pushed corn yields to their lowest since 1995, has eased over the eastern Corn Belt while it persists over the western Great Plains. Dried pastures have forced cattle ranchers to hold the smallest herds in 61 years, government data show. Farmer profits may reach a record $128.2 billion this year as growers expand output and rebuild inventories, the USDA said earlier this week.

Corn held its place as the biggest domestic crop, valued at $77.4 billion, up from $76.9 billion in 2011, according to the USDA, which also revised its 2011 figures in today’s report.

Soybeans were the second-most valuable at $43.2 billion, up 12 percent from $38.5 billion, the USDA said. Hay rose 1.7 percent to $18.6 billion as the drought harmed supplies of forage crops, while wheat surged 25 percent to $17.9 billion from $14.3 billion as farmers turned to it as a feed grain to supplement depleted corn supplies, according to the report.

The U.S. cotton crop was valued at $6 billion last year, down 15 percent. California was the top agricultural producer, with crops valued at $28 billion, followed by Iowa, Minnesota and Illinois.

To contact the reporters on this story: Alan Bjerga in Nairobi at abjerga@bloomberg.net.

To contact the editor responsible for this story: Steve Stroth in Chicago at sstroth@bloomberg.net.

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