Numbers for US corn production surprisingly higher
In something of a surprise forecast, two agricultural research firms are projecting the second largest corn crop in the US, prior to the monthly report from the USDA. The prediction is made in light of demand from livestock and poultry sectors, offsetting fears of poor yields resulting from spring and summer flooding.
August 7, 2008
Two private agricultural research firms are predicting the 2008 corn crop will be the second largest in history, despite lower planted acreage and early season floods.
With the cost of feeding hogs, cattle and chickens the main market driver this year, the meat industry is paying more attention than usual to the size of this year's crops.
USDA will make its first corn and soybean crop estimates based on actual field surveys Aug. 12. Ahead of that report, private forecasters this week have begun to issue their own estimates.
One estimate of particular interest is that of Informa Economics, a private agricultural research consulting firm. According to a media report attributed to sources familiar with the firm's estimates, Informa is forecasting the U.S. corn crop at 12.33 billion bushels, based on an average yield of 155.4 bushels per acre. That would put the U.S. corn crop below last year's record 13.1 billion bushels, but ahead of the previous record set in 2004 at 11.8 billion bushels.
Brokerage firm FC Stone also reportedly sees the 2008 corn crop as the second largest ever, forecasting 12.197 billion bushels on an average yield of 154.5 bushels per acre.
Informa put the U.S. soybean crop at 3.054 billion bushels, based on an average yield of 42 bushels per acre. FC Stone pegged the soybean crop at 2.993 billion bushels with an average yield of 40.5 bushels per acre.
In 2007 the U.S. soybean crop fell to 2.6 billion bushels from a record 3.2 billion bushels in 2006, as acres shifted from soybeans to corn to meet ethanol demand. This year, some of those acres shifted back to soybeans.
University of Illinois Extension Economist Darrel Good believes the USDA corn and soybean crop forecasts next week will come in lower than Informa's, which assumes larger harvested acreage for both corn and soybeans than USDA predicted in June, given early-season flooding.
That said, Informa's yield estimates are consistent with current crop ratings, Good noted. As crop conditions have improved over the summer, corn and soybean prices have dropped in recent weeks, but still remain well above what it cost to feed livestock a year ago.
The wild card remains how well the crops can continue to make up lost time from a late start.
"Crop size will be influenced by remaining growing season weather and soybeans are vulnerable to an early freeze," said Good. "A lot of yield uncertainty will persist after the August report."