Not the usda potential production..................
High prices were not profitable for large areas of the midwest. But they were survival. When dry land break even yields were absent for the last 4 years, high price meant survival..
If you take the national production over the last few years, high prices were a direct reflection of production(and monetary policy and china trading US dollars for more stable commodities, etc). So Price does not raise profit across the board. It only moderates loss... If you, as an individual, were able to produce in normal patterns over the last 4 years, you were not normal, if you were normal the prices would not have gone up.
I, to often, make the immediate mistake of saying prices have come down on rumors of better production. ----- a half truth......
Prices come down for several reasons other than increased production one being "Lower prices create lower prices and higher production, which brings lower prices...
One thing we never document --- not us or the usda --- is production that is available to the market. When Prices are high producers tend to keep some grain.... off the market........ for at least one tax season. Especially producers who are motivated by tax policy. Producers who are not motivated by tax policy are few.... it's a survival thing for those who are not guaranteed a big crop every year...
And of course, as it has this fall, in lower price years, there are decreases in bushels held off the market. The policy that limits immediate profits also limits immediate losses with higher sales.... And the market has been confirming this activity since mid summer...
The best news we will see in the market may come in soybeans which may turn upwards with the gradual release of Argentine "savings accounts"..... if so it will be signaling the end of the harvest dumping of US beans....
