The U.S. corn crop is projected to reach record production this year but won't be quite as large as initially expected because heavy spring rain in parts of the country prevented some acres from being planted, according to the U.S. Department of Agriculture's Friday (Nov. 8) crop production report.
The report gave farmers and commodities traders their first glimpse at U.S. crop production since September because the partial federal government shutdown canceled the October report.
Listen to Chris Hurt talk about the impact of the canceled Oct. report.
The USDA's National Agricultural Statistics Service projected that corn production will reach almost 14 billion bushels, up nearly 1 billion bushels from the record set in 2007.
While 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 farm incomes.
Listen to Hurt talk about the Nov. 8 report.
USDA lowered harvested corn acres by nearly 1.9 million acres and soybeans by about 700,000 acres, primarily because of land that did not get planted due to excessive spring rains.
"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."
Listen to Hurt talk about surprises in the crop production report.
Another positive for farmers is that USDA recognized the growing demand for the nation's corn and soybean crops from both export buyers, such as China, and domestic buyers, such as livestock producers.
"What we saw was demand with lower prices over the last four to six weeks has increased consumption of U.S. corn," Roberts said. "Export sales have increased, and the net result is that there's only a very small increase in ending inventory.
"The high consumption number offset the higher demand number, resulting in a more positive result than people feared coming into the report."
The USDA currently is estimating the national average farm-level corn price for the 2013 crop will be $4.50 per bushel, compared with $6.89 per bushel for the 2012 crop.
USDA projected national soybean production to reach 3.26 billion bushels, which would represent the third-largest crop on record.
The national average price received for 2013 soybeans is estimated to be $12.15, compared with $14.40 for the 2012 crop. According to Hurt, soybeans could offer some income stabilization for crop farmers.
"We haven't seen the same erosion in soybean prices that we have in corn because of the strong demand from China and tight world supplies until the South American crop comes into the markets later this winter," he said. "Soybeans could be a stabilizing influence in farm incomes.
"It's never just about the size of the crop but what buyers you have and at what price they will pay for it."
The overall large corn and soybean crops will be welcome news to end users, such as grain processors and livestock producers, and ultimately food and fuel consumers.
With grain more readily available and at lower prices, food price inflation should fall below the general rate of inflation. For the last two years, food price inflation has been higher than general inflation.
Indiana farmers are following the national trend with projected record corn production at more than 1 billion bushels for the first time. At 174 bushels per acre, the state's farmers also are expected to break the record for yield. The record of 171 bushels per acre was set in 2009. This compares with a national per-acre corn-yield average of 160.4 bushels, which Hurt said would be a fairly normal yield.
The state's soybean farmers are expected to produce an estimated 2.6 million bushels on yields of 50 bushels per acre. That would tie per-acre yields from 2006 and fall just short of the record 51.5 bushels per acre in 2004. These yields compare with 43 bushels per acre nationally, which Hurt said also is close to normal expectations.
In Ohio, USDA estimates 3.63 million acres of corn will be harvested, down from 3.65 million in 2012. Yield is expected to average 174 bushels per acre, sharply up from 123 bushels last year. Total corn production is an estimated 631.6 million bushels, up from 448.9 million in 2012.
The full report can be downloaded from the USDA-NASS website at http://www.nass.usda.gov.