According to St. Louis Post-Dispatch, the corn harvest is looking plentiful this year, but farmers are concerned that the demand won’t be as great as the yield.
With high corn yield comes lower prices. Farmers — especially those who rent their farmland — struggle to make a profit when the price per bushel drops below production costs. Farmers can choose to store the corn instead of selling it in order to avoid losing money this year, even though better prices next year aren’t guaranteed.
One way that farmers have sought to deal with this potential problem is through crop insurance and provisions of the Farm Bill.
From St. Louis Post-Dispatch:
“Crop insurance kicks in when yields or revenues drop 25 percent below a farm’s average. The farm bill subsidies are triggered by corn prices falling below $3.70 a bushel over an extended period — though it’s unclear whether those prices will fall low enough to trigger that.”