By Agri-Pulse Staff
© Copyright Agri-Pulse Communications, Inc.
Washington, Oct. 8 – A big drop in both the corn yield and production estimates in USDA's Oct. 8 Crop Production report caught the industry by surprise, according to American Farm Bureau Federation economist John Anderson.
“Folks were expecting to see a drop in average yields from last month’s report because of poor late-season weather conditions across much of the Corn Belt, but nobody was forecasting this big of a drop in the corn crop,” Anderson said.
USDA forecasts corn production at 12.664 billion bushels, down 3.8 percent from the 13.16 billion production forecast last month and lower than last year’s record 13.11 billion bushel crop. “This is a pretty sizable drop in production,” Anderson said. “We saw a really big drop in USDA’s forecasted average yield for corn because of adverse weather in the big corn states of Illinois, Iowa and Indiana. USDA is forecasting a national average yield of 155.8 bushels per acre, compared to 162.5 bushels per acre in September’s report. A 6.7 bushel drop in yield is pretty significant.”
The smaller-than-expected corn crop and the lowest stocks situation since 1995 prompted USDA to forecast a market year average cash price of around $5 per bushel – up 60 cents from last month’s price forecast. “Corn producers will welcome the higher price, but livestock and dairy producers will have to pay more than they expected to for feed,” Anderson said.
Meanwhile, the National Corn Growers Association (NCGA) responded to the USDA forecasts with the reassurance that despite the lowered corn production estimate, “U.S. corn farmers will be able to meet all demands for food, feed, fuel and exports . . . The harvest of 12.7 billion bushels, the third-largest crop in history, will still provide a surplus, or ending stocks, of nearly 1 billion bushels.”
NCGA President Bart Schott, a grower in Kulm, N.D., said “Our farmers are working hard to bring in a great crop this year, despite the many challenges. We have had many reports of lower yields and, at the same time, are hearing stories of higher-than expected yields in some areas. This may not be a record year, but we’re bringing in the corn and meeting all needs, even for our export markets.”
Schott explained that “A global perspective is important. Global coarse grain supplies are nearly unchanged, and lower U.S. supplies are offset by increased foreign grain production. We expect farmers in South America to respond to these market signals, just as we know U.S. farmers will do when it comes time to make planting decisions for the 2011 crop.”
Schott noted that, as of Oct. 3, only 37 percent of the U.S. corn crop was harvested and that much of what has been harvested to date was in the areas most adversely impacted by the summer weather. NCGA sees the potential for an upward adjustment in the overall production number as the harvest is completed.
To listen to Stewart Doan's audio report on USDA's crop forecasts, go to: www.agri-pulse.com/Audio-Friday.asp
For more details on Friday's USDA forecasts, go to: www.agri-pulse.com/20101008H_USDA_Crop_Production_Report_Lowers_Corn_Soybean_Forecasts.asp
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