The first U.S. Department of Agriculture outlook for this year’s corn crop is calling for record yields and record production.
The May 10 World Agricultural Supply and Demand Estimates report projects U.S. feed grain supplies for 2012/13 at a record 416.3 million tons, up 16 percent from 2011/12 at a record 416.3 million tons, with corn production called at a record 14.8 billion bushels, up 2.4 billion from 2011/12.
A projected 5.1-million acre increase in harvested area and higher expected yields, compared with 2011/12, sharply boost production prospects. The 2012/13 corn yield is projected at a record 166.0 bushels per acre, 2.0 bushels above the 1990-2010 trend reflecting the rapid pace of planting and emergence. Despite the lowest expected carry-in in 16 years, corn supplies for 2012/13 are projected at a record 15.7 billion bushels, up 2.2 billion from 2011/12. Total U.S. corn use for 2012/13 is projected up 9 percent from 2011/12 on higher feed and residual disappearance, increased use for sweeteners and starch, and larger exports.
Under the corn usage category, USDA is increasing feed and residual use by 900 million bushels based on a sharp rebound in residual disappearance with the record crop and an increase in feeding with lower corn prices and higher expected pork and poultry production and exports are projected to be 200 million bushels higher than last year on abundant domestic supplies, lower prices, and higher expected China demand. Projected corn use for ethanol is unchanged at five billion bushels on the year as weak gasoline consumption limits domestic blending opportunities.
Of course, the downside to bigger supplies is lower prices. USDA is projecting at this point that the season-average farm price this year will be somewhere around $4.20 to $5.00 per bushel, down sharply from the 2011/12 record projected at $5.95 to $6.25 per bushel but still much better than it used to be.