The U.S. Department of Agriculture’s latest forecast projects a record-setting year for corn production that caught many in the market off guard.

“We’re looking at a production number of over 16.7 billion bushels,” said USDA Chief Economist Seth Meyer. He added that projected corn yields are also at record highs, with “a yield of 188.8 bushels an acre.”

Meyer noted the new forecast slightly exceeded expectations. “When we look at the trade range, 188.8 bushels is slightly above the highest trade range yield estimate,” he said.

But the bigger surprise, Meyer explained, came from the updated acreage data from the Farm Service Agency (FSA), which added another 2 million acres of corn to the estimate.

“So now we’re talking about corn acres at 97.25 million acres.”

This August report marks a key turning point in the growing season, offering the first survey-based yield and production estimates.

“This is where we get the first survey-based yield and production numbers. In August, it’s a farmer-based survey, but this is the second year where NASS has pulled forward and used FSA data in order to adjust acreage. So, I think when we talk about balance sheet changes, we’ve got to keep in mind that we’re getting both the first survey-based yield information, along with the first assessment of FSA acreage.”

Market reaction was swift, with corn prices dropping on the news.

“A lot of extra corn [is] putting some downward pressure on prices and making a downward adjustment of 30 cents to $3.90 for the 25–26 marketing year price,” Meyer said.

As for how the USDA expects all that corn to be used, Mark Jekanowski, chair of the World Agricultural Outlook Board, outlined increases across several demand categories.

“Increases in virtually all of the use categories. We raised feed and residual by 250 million bushels. Our export forecast, we raised by 200 million bushels. Ethanol use raised about 100 million bushels this month. Our ending stocks forecast was raised by 457 million bushels,” he said.