U.S. corn and soybean crop recovered beyond expectations
After a crop season interrupted by devastating floods, Indiana’s corn crop has made a surprising recovery, Purdue University and state agricultural officials the Indiana State Fair.
“It’s been an amazing recovery for
Hurt; Ken Klemme,
presented crop production projections and analysis during the fair’s annual crop briefing. The briefing followed the release of the U.S. Department of Agriculture’s August crop report.
The USDA projected total
“This report shows an amazing recovery for the corn crop and we have pulled back from a crisis in food supply and crop availability,” Hurt said. “The
“When you combine the tight food supplies with the flooding in June—we were just right on the edge of not having enough supply and availability.”
Hurt said these numbers allow us to pull back from an emergency situation. When it comes to the food versus fuel debate, this report gives us a lot more confidence that we are still going to have high corn prices from any historical stretch, but we are not going to have major reductions in feeding livestock or constraints on ethanol production.
“There’s not abundance of corn,” Hurt said. “But compared to what we’ve been thinking the last three, four, five months, this is a blessing.”
Even with corn production down, it’s still 17 percent above 2006. As of Aug. 1, yields are expected to average 155 bushels per acre, up about 2.6 percent from last year. If yields hold, it will be the second highest average yield on record, behind 2004. Corn growers are expected to harvest 79.3 million acres for grain, up 350,000 acres from June but 8 percent lower than last year.
While corn production is slightly down, soybean production is up at 2.97 billion bushels. Yields are expected to average 40.5 bushels per acre, down 0.7 bushel from 2007. If realized, this will be the fourth largest production on record. Soybean growers are expected to harvest 73.3 million acres, up 2 percent from June and up 17 percent from 2007.
“The yield numbers for soybeans reflects that the crop is just not very far along and that there’s still potential to be had on beans,” said
Hurt said yield predictions may be a bit high for the corn crop, but soybeans still have potential to increase in yield throughout September and into October.
“The weather has been counter seasonal this year,” Hurt said. “Typically the crop looks best in June and this year it looked the worst in June.
“But with the good weather we’ve had the last few weeks and a few rain showers, it has gotten much better. We’ve even seen a 30 percent drop in prices from the highest point as the weather has gotten better. This year’s 2008 corn crop is priced at $5.40 per bushel.”
Hurt expect to see continued downward pressure on corn prices after this report. USDA has lowered their estimates on corn by $.60 a bushel.
“It’s still high for the
Klemme said that this is a time where energy market and the agriculture market intersect.
“For every bushel or pound of agricultural production, there’s a buyer for that product and because of that we are going to continue to see tight balance sheets in this new paradigm,” Klemme said. “We see the response to the high prices in producers trying to maximize production on every acre they have in operation.
The USDA crop report is available online at http://www.usda.gov/nass/PUBS/TODAYRPT/crop0808.pdf .