USDA cuts corn outlookThe government slashed its expectations for U.S. corn and soybean production for the second consecutive month Aug. 10, predicting what could be the lowest average corn yield in more than 15 years, as the worst drought in decades grips major farm states.
By: Jim Suhr, Associated Press
ST. LOUIS — The government slashed its expectations for U.S. corn and soybean production for the second consecutive month Aug. 10, predicting what could be the lowest average corn yield in more than 15 years, as the worst drought in decades grips major farm states.
Still, Agriculture Secretary Tom Vilsace, insists U.S. farmers and ranchers remain resilient and the country will continue to meet demand as the global leader in farm exports and food aid.
The U.S. Department of Agriculture cut its projected U.S. corn production to 10.8 billion bushels, down 17 percent from its forecast last month of nearly 13 billion bushels and 13 percent less than last year. That also would be the lowest production since 2006.
In its World Agricultural Supply and Demand Estimates report, USDA now expects corn growers to average 123.4 bushels per acre, down 24 bushels from last year in what would be the lowest average yield in 17 years.
Soybean production is now forecast at 2.69 billion bushels, a 12 percent decline from last year and well off the 3.05 billion bushels USDA had expected last month. The expected average yield of 36.1 bushels per acre would be the lowest since 2003.
Corn farmers had expected a record year just months ago, when they sowed 96.4 million acres — the most since 1937. USDA now predicts only 87.4 million acres will be harvested, although it notes the crop still could be the eighth-biggest in U.S. history.
On Aug. 9, the U.N. food agency drew a direct correlation between price hikes in basic food commodities and the months of parched conditions in farm states. The Rome-based Food and Agriculture Organization says in its monthly price report that its overall food price index climbed 6 percentage points in July, although it was well below the peak reached in February 2011.
Food price hikes
Severe drought punishing the U.S.’s midsection has sent corn prices soaring, and expectations of crop damage from dry weather in Russia sent world wheat prices up 19 percent, according to the FAO.
“Americans shouldn’t see immediate increases in food prices due to the drought,” Vilsack said as he visited drought-stricken Nebraska.
Rick Whitacre, a professor of agricultural economics at Illinois State University, says consumers may see modest price increases at grocery stores, the biggest price likely to be a 4 to 6 percent increase for beef and pork.
The Aug. 10 USDA report amplified the troubling picture painted a day earlier when the latest weekly U.S. Drought Monitor map showed extreme or exceptional drought in key farming states in the Great Plains rose to 24.14 percent, up nearly 2 percentage points from the previous week.