USDA projects second largest corn crop in history

By Hope Deutscher | August 10, 2009
Report posted Aug. 12, 2009, at 2:16 p.m. CST

In its Aug. 12 World Agricultural Supply and Demand Estimate report, the USDA projected 2009-'10 corn production at 12.8 billion bushels - up 471 million bushels - due to higher forecast yields that more than offset a small reduction in harvested areas reported in the June 30 USDA Acreage Report. U.S. corn supplies are projected at a record 14.5 billion bushels, up 134 million bushels from the previous record in 2007-08.

"American farmers are the subject of numerous erroneous and ill-informed attacks, yet they shrug those off to continue providing food, feed and fuel for the nation," Renewable Fuels Association President Bob Dinneen said. "Technological advancements in both the seed and in the field are allowing farmers to produce more per acre, while using fewer inputs such as fertilizer and diesel fuel. There can be no doubt that we are fully capable of meeting the food and feed obligations we have to the world while simultaneously helping break our addiction to foreign oil."

According to the WASDE report, food, seed, and industrial use was raised 100 million bushels with higher expected use for ethanol, supported by favorable ethanol producer returns and strong incentives for ethanol blending. The USDA also estimated that 4.2 billion bushels of the projected 12.8 billion bushel corn crop would be used in ethanol production. Using ethanol industry averages, such a usage would represent 11.76 billion gallons of ethanol and more than 32 million metric tons of distillers grains.

The 2009-10 marketing-year average farm price is projected at $3.10 to $3.90 per bushel, down 25 cents on both ends of the range. The marketing-year average reflects higher prices for corn sold for forward delivery over the past several months ahead of the sharp downturn in futures and cash market prices since early June.

With rising supplies and lower expected prices, corn use for 2009-'10 is projected higher. Feed and residual use was raised 100 million bushels with the higher yield and production expected to add to residual loss.

Exports are projected 150 million bushels higher, reflecting reduced foreign production prospects and stronger expected import demand from Mexico and Taiwan. Ending stocks are projected up 71 million bushels with higher expected use partially offsetting the increase in production. Corn production prospects are reduced for Mexico, Russia, South Africa, Ukraine and the European Union. World coarse grain imports and exports are both projected higher for 2009-10, mostly reflecting higher expected corn exports - up 2.6 million tons this month. Corn imports are raised 1.5 million tons for Mexico and 300,000 tons for Taiwan. The 3.8 million ton increase for U.S. corn exports is partially offset by a 500,000 ton reduction each for South Africa and Ukraine, and a 200,000 ton reduction for Russia. Global coarse grain ending stocks are projected higher, mostly reflecting a 2.3 million ton increase in corn stocks.