Difficult growing conditions this spring and summer and the hottest summer since 1955 in parts of the Midwest have significantly eroded corn yields in the United States, according to a Bloomberg News report this week. The average estimate of 30 analysts surveyed by Bloomberg News is 12.554 billion bushels, down 2.8 percent from USDA’s August projection of 12.914 billion bushels and 0.8 percent below the 2010 crop of 12.447 billion bushels.
Analysts also reported that end corn stocks for 2011-12 will be the lowest since 1996. “The crop could get smaller and that will increase risks for prices to move higher,” Dan Cekander, the director of grain research for Newedge USA LLC told Bloomberg. “Supplies will be tight for another year, and that puts a premium on adding acreage next year and producing a big crop” to rebuild depleted inventories, said Cekander, who forecast a harvest of 12.521 billion bushels.
The heat in July damaged corn plants during their reproductive stage, reducing the number of kernels on each ear, Kyle Tapley, an agricultural meteorologist for MDA Information Systems said. Earlier in the growing season, when ear size is determined, plants were stunted by delays in planting following floods and cool temperatures, said Tapley, who cut his crop estimate to 11.914 billion bushels from 12.223 billion a month ago.
Illinois will be the “trump card” for determining final U.S. yields because the heat and dryness was centered on the state, the second biggest corn state, Jim Bower, president of Bower Trading said. Leon Corzien, a past president of National Corn Growers Association who farms near Assumption, Illinois, said “We won’t run out of corn. People just won’t get as much at the prices they want to pay. There is supply rationing already happening.”
“We will use less corn this year in livestock rations,” said Darrel Good, economist at the University of Illinois. “The abundance of lower-quality wheat both domestically and internationally is already slowing corn used in animal feed. Rising crude-oil prices, which jumped 21 percent in the past year, are supporting increased blending of corn-based ethanol in U.S. gasoline supplies,” Good said. “We have not seen a slowdown in ethanol production,” Good said, “and I do not foresee a drop in corn prices because we will need to encourage more planting next year to begin to rebuild inventories.”
