There were at least two big surprises from today’s USDA crop reports – record projected corn yields and less-than-expected hurricane damage to the Florida orange crop. That’s according to John Newton, director of market intelligence for the American Farm Bureau Federation.
In its monthly Crop Production report, USDA estimates the national corn yield at 175.4 bushels per acre, up 3.6 bushels from the October forecast and up 0.8 bushel from 2016. If realized, this would be the highest average yield ever and produce a crop of nearly 14.6 billion bushels, down 4 percent from last year’s record but up 2 percent from the October forecast.
“That yield figure was a really big surprise,” Newton said in a phone interview, especially after the stress the crop experienced from drought early in the growing season in parts of the Midwest. “Folks were expecting yield numbers around 172 or 173 bushels,” he said.
“The challenge now is, what are we going to do with all that corn?”
Newton also said USDA’s estimate of the Florida orange crop came in bigger than many expected, at 50 million boxes. That number is down from 54 million boxes projected last month, in the first USDA estimate after Irma struck in September. And, if realized, it would be the lowest production from the Sunshine State since the end of World War II. Still, it’s bigger than many were anticipating.
“Early estimates were that 70 percent of the crop may have been destroyed,” Newton said, adding that some analysts were predicting crop estimates of 30 million to 40 million boxes.
After USDA’s October report, Florida Citrus Mutual, the state’s largest growers association, questioned the government’s estimate, saying it was made too soon after the storm and was probably too high.
“The agency could not accurately account for the full extent of the catastrophic damage from Hurricane Irma,” the organization said last month. “Historically, the USDA has a high margin of error in crop years with a natural disaster.”
Other highlights from the Crop Production report and the World Agriculture Supply and Demand Estimates (WASDE), which was also released Thursday:
-SOYBEANS: USDA says the soybean harvest will total 4.425 billion bushels, down 5 million bushels due to a fractionally lower yield, but still a record. Ending stocks are projected at 425 million bushels. The season-average price is projected at $9.30 a bushel, up 10 cents at the mid-point.
-WHEAT: Projected ending stocks were lowered 25 billion bushels due to increased exports (to 1 billion bushels), supported by recent sales to Iraq. The estimate for all-wheat production for the 2017-2018 crop year was left unchanged from October at 1.741 billion bushels.
-COTTON: The U.S. production forecast was raised 1 percent to 21.4 million bales, as a smaller crop in the West is more than offset by gains in the Southwest and other regions. U.S. ending stocks are seen at 6.1 million bales, up 300,000 bales, and, at 34 percent, at their highest share of use since 2008/2009.