Farmers on Track For Second Largest Corn Crop

By Sarah Young Livestock Editor
Thursday, August 21, 2008 8:00 AM CDT

USDA claims the United States is on track for the second largest corn crop in history according to the Crop Production Report released Aug. 12.

The near record crop is estimated to reach close to 12.3 billion bushels. Although the estimate is 6 percent below last year, it is 17 percent above 2006 numbers.

It’s a good number considering the extensive flooding in the Midwest earlier this summer. To compensate for change in planting intentions due to flooding, the USDA had to do a little more leg work for this report.

The USDA included this statement in the report: “Extensive rains and flooding during June in several Midwestern States caused producers to change harvesting intentions for crops already planted and modify planting decisions for acres not yet planted. In an effort to more accurately determine how many acres producers planted and still intend to harvest, NASS conducted an intensive re-interview study in July in flood-affected areas. Acreage estimates in this report reflect this updated information.”

Based on the extensive re-interviews in Illinois, Indiana, Iowa, Minnesota, Missouri, and Wisconsin, planted acreage of corn is estimated at 86.977 million acres, 350,000 less than the June estimate.

Acreage estimates declined by 100,000 in Illinois, Indiana, and Iowa and 50,000 in Wisconsin. Wisconsin planted a total of 3.74 million acres, with expected harvestable acres of 2.95 million at a yield of 141 bushels per acre, resulting in close to 416 million bushels.

Acreage expected to be harvested for grain is forecast at 79.29 million, 350,000 more than forecast in June. The U.S. average yield potential is pegged at 155 bushels, 3.9 bushels above the 2007 average and the second highest following the average of 160.4 bushels in 2004. The crop forecast of 12.288 billion is 786 million smaller than the record crop of 2007.

Terry Francl, a senior economist with the American Farm Bureau Federation, said yields in all of the top-five corn producing states, with the exception of Illinois, either matched or exceeded yield numbers in 2007. “Illinois was only off two bushels per acre, but what was unexpected was that Iowa’s estimated yield of 171 bushels per acre was unchanged from last year.”

The ideal growing conditions during the month of July helped bring crops back on track this season.

However, with much time left before harvest, these numbers could change drastically if the weather turns anything less than ideal.

“The market will try to gauge whether production prospects change during August and early September," said Darrel Good, University of Illinois Extension marketing specialist following the report release. "The USDA's weekly Crop Progress report indicated that crop condition ratings improved for corn and held about steady for soybeans during the week ended Aug. 10. Both crops lag average maturity.

"Only 30 percent of the corn crop was in the dough stage compared to the average of 50 percent and only 60 percent of the soybean crop was setting pods, compared to the average of 75 percent. In addition to average temperature and rainfall in August and early September, production could be influenced by the occurrence of the first killing frost."

Average corn prices this year are expected to drop to $4.90 to $5.90 per bushel, down 60 cents from last month's forecast of $5.50 to $6.50.

Corn prices soared to record levels near $8 after the floods, the worst to hit the Midwest in 15 years. Corn prices have already dropped under $5 per bushel, though still higher than in 2006, when the price was $2 per bushel.

Soybeans

Soybean production is slated to be the fourth largest harvest on record. Planted acres of soybeans in the United States are now estimated at 74.783 million acres, 250,000 above the June estimate. Acreage estimates were increase by 100,000 acres in Indiana and Iowa and by 50,000 acres in Wisconsin.

Harvested acreage is projected at 73.341 million, 1.22 million more than forecast in June. Forecasts of harvested acreage increased by 50,000 in Illinois, Indiana, and Iowa; by 10,000 in Missouri; and 70,000 in Wisconsin.

"The U.S. average yield potential is seen at 40.5 bushels, 0.7 below the 2007 average and the lowest since 2003,” said Good. "Yields are expected to be below the 2007 average in Illinois and Iowa, but a bushel higher in Indiana. The projected crop of 2.973 billion bushels is 388 million larger than the 2007 harvest."

Wisconsin planted 1.7 million acres of soybeans with area harvested at 1.63 million acres harvested at a yield of 42 bushels per acre resulting in a total production of over 68 million bushels.

“While the weather in July turned almost ideal for corn throughout much of the Corn Belt, the soybean crop continued to struggle with later plantings and uneven stands as reflected in the August Crop Production Report,” Francl said. “Soybeans are now in the flowering and pod-filling mode so a better assessment of the crop’s condition will be forthcoming in the September report.”

Soybean prices are also expected to fall to $11.50 to $13 per bushel, down 50 cents from $12.00 to $13.50 last month, the USDA reported.

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