USDA predicted on Tuesday that corn farmers would see a record crop this year. Over 1.5 billion bushels more than the previous record. But this enormous supply is not benefiting corn farmers. The demand for corn has not been able to catch up, which has caused the price of corn to plummet.

It now sits at $3.90 a bushel, back to the price between 2016 and 2018, according to Chad Hart, an economics professor at Iowa State. Low prices, in this case, are not necessarily great for everyone.

“You look at Iowa’s economy and the price of corn,” said John Maxwell, the owner of Cinnamon Ridge Dairy Farms. “They mirror each other every single year.”

The impact of the low costs hurts farmers, but it can also impact the consumer in different ways.

“The negative (is) that it’s slowing down that economic activity in the rural countryside,” said Hart. “The positive (is) that it’s at least taking off some of the food price inflation we’re seeing from the meat sector.”

Farmers are the ones who see the biggest negative impacts. They typically fare better in low-yield high cost years. With the prices so low, Maxwell says farmers either have to store the corn or sell under the cost of production. Farmers are making a record amount of export sales for the crop, but it just is not enough to keep up with the yield to drive the price back up.

“In order to get by right now, they’re probably using up their cash reserves,” said Hart. “Maybe obtaining some larger loans in order to keep the farm business going.”

Corn is not the only sector of agriculture that is hurting economically. The soybean economy has taken a hit with the 35% tariffs placed on exports to China. They are the biggest importers of soybeans for farmers. The tariffs have meant sales have decreased along with the price of soybeans, different from the case of corn.

“More than likely we’d be seeing very strong export sales for soybeans,” Hart said about soybean exports without the tariff. “As it stands right now, we’re a little bit below average, so it would be a better market.”

Sen. Chuck Grassley (R-Iowa) visited with farmers at a roundtable in Scott County last week. Grassley said it was only a matter of time before China drops their tariffs, said Maxwell, who hosted the meeting. Then the U. S. would do the same and free trade would be established. Maxwell believes farmers may not be able to wait out the trade war.

“It’s like free milk tomorrow,” said Maxwell, describing an old adage. “Can I wait till tomorrow? All of a sudden I see the sign (the next day) and it says free milk tomorrow again. It just never seems to get there.”

Hart believes we are near the low for corn and soybean prices and believes it will turn around over the next few years. He said agriculture typically runs on a seven to 10 year cycle.

“From an Iowa perspective, things are more challenging financially right now,” said Hart. “But over time they will get better again.”