The U.S. corn crop is projected to reach record production this year but won't be quite as large as initially expected because heavy spring rain in parts of the country prevented some acres from being planted. That's according to USDA's November Crop Report, released Friday, November 8.
The report gave farmers and traders their first glimpse at crop production since September because the partial federal government shutdown canceled the October USDA report. USDA's National Agricultural Statistics Service is estimating U.S. corn production in 2013 will reach nearly 14 billion bushels, up nearly 1 billion bushels from the previous record of 13.1 billion set in 2009.
USDA expects 13.99 billion bushels to be harvested this fall, more than the September forecast of 13.8 billion bushels and up 30% from the 2012 harvest. While this year's U.S. crop will be a record, it won't be as high as some people had expected. There was a lot of fear coming into this report that the 2013 corn crop would be so large that prices would be extremely low. "While yields are up substantially from last year, prevented planting acres have offset some of that," notes Chad Hart, Iowa State University Extension grain marketing economist. USDA lowered harvested corn acres by nearly 1.9 million and soybean acres by about 700,000 nationally, primarily because of land that did not get planted due to excessive spring rains.
If realized, a 13.99 billion bushel crop will be a new record production for U.S. corn. Based on conditions as of November 1 yields are expected to average 160.4 bushels per acre, up 5.1 bushels from the previous forecast and up 37 bushels from the 2012 national average. If realized, this will be the highest national average yield since 2009. Area harvested for grain is forecast at 87.2 million acres, down 2% from the previous forecast and down slightly from 2012.~~~PAGE_BREAK_HERE~~~
Iowa corn crop is estimated at 2.2 billion bushels, putting Iowa No. 1 in corn production nationally in 2013
Even with a tough season of too much rain in the spring, followed by too much heat in the summer, Iowa's 2013 corn production is expected to hit 2.2 billion bushels, according to USDA's November estimate. That's 1.2% more corn than the last estimate in September and about 18% higher than the crop Iowa produced in 2012.
Based on November 1 conditions Iowa's 2013 corn yield is expected to average 169 bushels per acre, 7 bushels above the previous forecast and up 32 bushels from 2012. Planted and harvested corn for grain acreage in Iowa in 2013 is estimated at 13.6 and 13.1 million acres, both down 400 thousand acres from the previous forecast.
Iowa's soybean production is forecast at 415.4 million bushels, slightly above 2012 production and 2% more than September's forecast. Iowa would slip to No. 2 in soybean production behind Illinois if this November estimate holds as the final estimate. Final estimates for both corn and soybeans will be released by USDA in January. Farmers in Iowa are expected to average 45 bushels of soybeans per acre in 2013, two bushels more than the last report in September and a half bushel more than Iowa averaged in 2012. Planted acreage is estimated at 9.3 million acres with 9.23 million acres harvested, both down 200,000 acres from the previous forecast for the state.
U.S. soybean crop for 2013 is estimated to be the third largest on record
U.S. soybean production is forecast at 3.26 billion bushels, up 3% from the previous forecast and up 7% from last year, USDA says. It would be the third largest U.S. soybean crop on record. Based on November 1 conditions, yields are expected to average 43 bushels per acre, up 1.8 bushels from the previous forecast and up 3.2 bushels from 2012. Area for harvest in the U.S. is estimated at 75.7 million acres, down 1% from both the previous forecast and last year.~~~PAGE_BREAK_HERE~~~
The better-than-expected production numbers for corn and beans in 2013 come as commodity prices remain low. Last year, farmers sold their corn at a peak of $8 a bushel. On Friday Nov. 8, corn closed at $4.26 a bushel on the Chicago Board of Trade. Farmers who rent land at average rental rates typically need around $4.40 to $4.60 a bushel to break even. These lower prices are good news for grain users, including livestock producers and ethanol manufacturers. Consumers are expected to see little difference in food prices.
While the U.S. has a big harvest of corn and soybeans this fall, demand is equally large to offset big supplies
While the November USDA report confirms big supplies of corn and soybeans, it also offers some encouraging news on the demand side, especially for soybeans.
"The November 8 USDA reports—the Crop Production report and the World Supply & Demand Estimates report— had plenty of changes on crop production and demand," points out ISU's Chad Hart. "The trade had expected larger production and that's what appeared in the reports. Corn production approached the 14 billion bushel level. Soybeans gained roughly 100 million bushels. But the demand shifts USDA is expecting, as indicated in their supply/demand projections are large enough to basically offset those production gains."
For corn, the biggest surge in demand forecast by USDA comes from the export market as 175 million bushels were added. Mexico and China have led the way there. USDA added 100 million bushels to its estimate of feed and residual use of corn, as meat production is held relatively steady. USDA's estimates of harvest and residual loss are increased. Ethanol usage of the 2013 corn crop is held steady at 4.9 billion bushels.
This November report is a little shot in the arm for corn and soybean markets, helping stabilize prices after they dropped during summer
On the soybean side, USDA increased its domestic crush forecast by 30 million bushels for the 2013 crop as soybean meal exports are on the rise. Exports of whole soybeans are also increasing, up 80 million bushels. That surge is also being led by China. "Overall, this November 8 report was a little shot in the arm for the markets, helping stabilize prices after the drop in prices during the summer," says Hart.~~~PAGE_BREAK_HERE~~~
A lot of farmers are breathing a sigh of relief that the crop is not larger and that there's a growing demand base for the crops produced. This November USDA report might provide a bottom for prices, observes Don Roose, an analyst with U.S. Commodities in West Des Moines.
USDA currently is estimating the national average farm-level corn price for the 2013 crop will be $4.50 per bushel, compared with $6.89 per bushel for the 2012 crop. The national average price received for 2013 soybeans is estimated to be $12.15, compared with $14.40 for the 2012 crop. Soybeans could offer some income stabilization for crop farmers. "We haven't seen the same erosion in soybean prices that we have in corn because of the strong demand from China and tight world supplies, which should stay tight until the South American soybean crop comes onto the world market later this winter," says Hart. "Soybeans could be a stabilizing influence in farm incomes."
Iowa barely maintained its status as nation's top corn producer, and will slip to second place behind Illinois in soybean production
Hart sums up the Iowa crops for 2013: "Looking at this latest USDA Crop Production report, the average Iowa corn yield is estimated at 169 bushels per acre, up 32 bushels from last year. That would indicate just over 2.2 billion bushels of corn production in Iowa in 2013. So Iowa will retain its #1 ranking in corn. But Iowa will slip to #2 in soybeans. The average Iowa soybean yield is estimated at 45 bushels per acre, up a half of a bushel from last year. State-level production is put at 415 million bushels. Illinois, on the basis of a better yield (49 bushels per acre) and higher harvested area (9.4 million acres), will take over as the state with the highest soybean production."
The full report can be downloaded from the USDA-NASS website.