The historic 2012 drought has cut crop production dramatically, with losses in corn especially heavy, according to the latest survey of growers by Farm Futures Magazine.
This year's corn output could fall below 10 billion bushels, more than 30% less than original estimates this spring from the U.S. Department of Agriculture. Based on current crop conditions and a survey of more than 1,800 farmers nationwide, Farm Futures estimates the crop at just 9.86 billion bushels, with an average yield of 117.6 bushels per acre.
"While farmers told us they planted a little more corn than shown in USDA's June 30 acreage report, abandonment will be much higher than the government predicted due to effects of the drought," said Bryce Knorr, senior editor for Farm Futures, who conducted the research. "With fields already being plowed under or cut for silage, it appears harvested acres could fall to just 84 million, almost 5 million less than USDA forecast in June."
Yields could decline further too, Knorr said. The average yield from the survey came in at just 114 bpa, while crop ratings currently project yields between 116 and 121 bpa. "Our estimate is based on both survey results and current conditions," Knorr said.
Farm Futures forecasts soybean production at just under 2.7 billion bushels, based on yields of 35.8 bpa nationwide. Survey results are close to estimates for soybeans based on crop ratings. Farmers reported planting more soybeans than USDA found in June, but also expected greater abandonment, leaving harvested acres close to the 75.3 million forecast by the government. USDA cut its forecast of soybean production in July to 3.06 billion bushels.
Farm Futures Market Analyst Arlan Suderman said he wasn't surprised the survey data confirmed a sub-10 billion bushel corn crop. "The scope of this year's drought is difficult to comprehend, both in its intensity and coverage," Suderman said. "The market clearly has more work to do as it attempts to bring demand into balance with the shorter supply."
"The soybean data may be the most sobering, considering that lower ethanol production is actually increasing demand for soymeal, even as the supply of soybeans shrinks. There's still time for the soybean crop to recover a portion of its lost production, but it could also see significant additional losses if the current weather pattern holds through August."
Farm Futures also asked growers how they plan to cope with effects of the drought. Many see high prices as an opportunity to price 2013 and even 2014 crops for a profit. "Crop insurance is also providing a good safety net for farmers, keeping them optimistic about the future," Knorr said.
Farmers' strategies for managing the disaster will be featured in the cover story of the September issue of Farm Futures.