U.S. on track for record corn production
Editor's note: Because of the partial government shutdown earlier this fall, USDA forecasts of the corn crop were delayed until Friday, Nov. 8.
It's going to be a huge corn harvest.
According to the U.S. Department of Agriculture on Friday, total corn production will be 14.0 billion bushels, up 1 percent from the last forecast issued in September and up 30 percent from 2012.
If realized, this will be a new record production for the United States.
However, while the corn production may be a record, Purdue Extension agricultural economist Chris Hurt and Ohio State University Extension economist Matt Roberts said production won't be as high as some expected, which is good news for corn farmers -- although for those buying corn, the news might not be so welcome.
"There was a lot of fear coming into this report that the corn crop would be so large that prices would be extremely low," Hurt said. "But while yields were up substantially, prevented planting acres offset some of that."
Roberts agreed, calling the report "mildly bullish" and noting that "the combination of higher yields and acreage cuts have theft the total corn harvest where the market expected it to be."
Yields are expected to average 160.4 bushels per acre, up 37 bushels from 2012. This would be the highest average yield since 2009.
Area harvest for grain is forecast at 87.2 million acres, down slightly from 2012.
The USDA’s “World Agriculture Supply and Demand Report,” adds that a 1.9-million-acre reduction in harvest area is more than offset by a 5.1 bushel-per-acre increase in the forecast yield.
“Despite a late planted crop and July and August dryness across much of the Corn Belt, cooler-than-normal summer temperatures and an extended growing season have supported higher-than-expected yields for most producers,” the WASDE report said.
Regionally, the USDA forecast higher corn yields across the Plains, Corn Belt and South.
U.S. corn supplies for 2013-2014 are projected 307 million bushels higher at a record 14,837 million bushels as this month’s increase in production combines with higher beginning stocks from the September 30 “Grain Stocks” report.
Total corn use is raised 275 million bushels, offsetting much of the supply increase. Feed and residual use is raised 100 million bushels with the larger crop. Corn exports are projected 175 million bushels higher with larger supplies and lower prices that have increased the competitiveness of U.S. corn as indicated by strong outstanding export sales and rising export shipments in recent weeks.
Ending stocks for 2013-2014 are projected 32 million bushels higher at 1,887 million.
The projected season-average farm price range for corn is lowered 30 cents at both ends to $4.10 to $4.90 per bushel. Cash and futures prices have responded to rising yield prospects over the past 2 months, sharply reducing the outlook for 2013-2014 farm prices.
The USDA also raised global corn consumption for 2013-2014 to 5.5 million tons, with foreign consumption up 3.0 million tons.
Corn feeding is raised for Mexico, Russia, Ukraine, Egypt, India, Colombia, and Turkey. Industrial use is raised for Brazil, but a larger reduction for China leaves foreign food, seed, and industrial use lower, partly offsetting the global increase in feed use.
World corn exports for 2013/14 are raised 7.7 million tons as lower prices are expected to boost demand. Corn imports are raised for Mexico as sorghum imports are reduced.
Corn imports are also raised for Egypt, the European Union, Colombia, and Turkey; all driven by higher expected feeding.
Corn imports are lowered for South Korea with an increase in wheat feeding. In addition to the increase in U.S. corn exports, 2013/14 exports are also raised for Brazil, the European Union, and Russia. Global corn ending stocks for 2013/14 are projected 12.9 million tons higher with most of the increase in China where consumption has been lowered for both 2012/13 and 2013/14. Corn stock changes elsewhere are mostly offsetting.
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