WASHINGTON, Aug. 12, 2016 – USDA is predicting bin-busting corn and soybean harvests this year, with record yields – and lower prices -- projected for the nation’s two most valuable crops.
In the latest World Agricultural Supply and Demand Estimates (WASDE) report, the department sees a corn crop of 15.153 billion bushels, up from 14.54 billion bushels predicted in July and 11 percent higher than last year’s harvest. The season’s first survey-based yield projection is for 175.1 bushels per acre, up 7.1 bushels from July’s trend-based forecast. If realized, both production and yield would be the highest ever.
Nearly all the Corn Belt states, with the exception of Minnesota and South Dakota, are forecast to have higher yields than a year ago, USDA said.
For soybeans, a harvest of 4.06 billion bushels was predicted, based on a projected yield of 48.9 bushels per acre. That’s 2.2 bushels above last month’s forecast and more than last year’s record of 48 bushels per acre.
The WASDE “was quite the surprise,” John Newton, an economist with the American Farm Bureau Federation, said just after the report was released at noon today in Washington. “Most analysts were expecting an increase in the corn yield, but it was more like 2 bushels per acre. This increase was a shock.”
Record or near-record crops could further depress corn and soybean prices, which have contributed to a dramatic drop in farm income. USDA is projecting an average farm gate price for a bushel of corn of $3.15, down from $3.60 for the current marketing year, which ends Aug. 31, and down from $3.70 in the previous year. For soybeans, the average cash price for the marketing year was set at $9.10 a bushel, down from $9.50 a bushel estimated in July.
Newton cautioned, however, that the harvest is just getting under way. “It will be interesting to see how USDA’s corn projection holds up.” He also said lower prices should spur export demand.
Chip Bowling, president of the National Corn Growers Association, said the report should be a “wake-up call” for Donald Trump and Hillary Clinton regarding the economic challenges facing farmers and rural America.
“Within recent days, we’ve heard a lot from both presidential campaigns regarding issues that are important to rural America,” Bowling said in statement. “We’ve heard opposition to the Trans-Pacific Partnership and attacks on our trade agreements – at the very time that agriculture needs to open new markets. We’ve heard support for expanding the use of renewable fuels – while American farmers are still battling decisions made by the US EPA that undermine biofuels use.
“Rural America needs help. With prices for a number of crop and livestock commodities already below the cost of production, the potential losses in rural America will result in fewer family farms, fewer jobs, and economic hardship. We need real solutions that help us access markets, expand biofuel use, and ensure a more sustainable future.”
Other highlights from today’s report:
-- U.S. all-wheat production is seen at 2.321 billion bushels, up from 2.052 billion in the previous year, with estimates raised from a month ago in all five major wheat classes. Exports for 2016/2017 are projected 25 million bushels higher from a month ago to 950 million bushels on expectations of an improved competitive situation and a sharp reduction of EU production. This, despite bigger crops in Russia, Ukraine, Kazakhstan, Australia and Canada.
-- Total U.S. rice supplies for 2016/2017 were lowered 2.2 million hundredweight (cwt) from July to 307.7 million cwt, still the highest on record. Production for the year that started Aug. 1 is forecast at 244.3 million cwt, the highest ever, though down 0.7 million from the July forecast.
-- Sugar production for the year starting Oct. 1 is estimated at 9.208 million short tons, raw value, an increase of almost 248,000 tons from the July forecast.
-- The forecast for total red meat and poultry production for 2016 is reduced from July as increased beef and turkey output is more than offset by lower pork and broiler production.
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