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USDA Forecasts Robust Corn and Soybean Crops

Despite this summer’s severe flooding in the Midwest, U.S. farmers are on pace to produce the second largest corn crop and fourth largest soybean crop in history, according to the Crop Production report recently released by the U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS).

At the start of this year’s growing season, food shortages and huge economic losses were the predominate forecast, especially with corn. Corn has long been an important feed used in meat production and in the deer and hunting industries for non-traditional livestock such as deer, elk and exotic game. In recent years corn has also increased in importance as ethanol made from corn has become a government-mandated gasoline additive.

Some analysts expressed concern that corn would reach $9 to $10 a bushel, a price that would probably have decimated livestock producers and ethanol plants alike.

However, today corn production is forecast at 12.3 billion bushels, only down six percent from last year’s record, but up 17 percent from 2006. Based on conditions as of August 1, corn yields are expected to average 155 bushels per acre, up 3.9 bushels from last year. If these predictions are accurate, the result would be the second highest corn yield on record, behind 2004. Growers are expected to harvest 79.3 million acres of corn for grain, down eight percent from last year.

Soybean production is forecast at 2.97 billion bushels, up 15 percent from last year but down seven percent from the 2006 record. Yields are expected to average 40.5 bushels per acre, down 0.7 bushels from 2007, while harvested area is expected to be 17 percent higher than in 2007.

This year’s increase in prices has been a burden on livestock producers and other food industry groups, which began campaigning for relief. But the Department of Agriculture rejected farmers’ request to take land out of conservation programs without penalty, a measure that would have increased production in 2009. The Environmental Protection Agency also denied a request by the governor of Texas to reduce the mandate on ethanol production for one year.

Despite the prospect for lower prices for feed in the future, livestock producers and ranchers are less than enthusiastic.

The August Crop Production report contains NASS’s first estimates of yield and production for corn, soybeans and other spring-planted row crops. To help ensure that these estimates were based on the best information available, NASS supplemented its standard data collection activities in order to account for the impact of the June flooding in the Midwest. NASS personnel re-interviewed approximately 9,000 farmers in flood-affected areas who had previously reported their planted acreage to the agency in early June. Additionally, NASS increased the number of corn and soybean fields selected for objective field measurements in the flood-affected areas and also increased the sample size for the Agricultural Yield Survey, through which farmers report expected crop yields.