The August USDA crop production report has the corn crop recovering even better than expected.
Corn production is now forecast at 12.3 billion bushels - almost five percent higher than predicted last month. Based on conditions as of August 1, yields are expected to average 155.0 bushels per acre, up 3.9 bushels from last year. If realized, this yield would be the second highest on record, behind 2004. Production would be the second highest on record, behind last year when producers harvested the most acres of corn for grain since 1933.
Meanwhile, USDA lowered its yield forecast slightly for soybeans. But, soybean production is still forecast at 2.97 billion bushels, up 15 percent from last year. All wheat production, at 2.46 billion bushels, is virtually unchanged from the July forecast but up 19 percent from 2007.
USDA will provide its latest answer to the question “How much corn this year?” early Tuesday morning with the latest crop forecast.
The pre-report wagering is expecting that the report will indicate less flood damage to the crop than was originally anticipated in Iowa, Illinois, Missouri and Wisconsin. The average analyst forecast is calling for a crop of 11.94 billion bushels of corn this year - not off too much from the original forecast of 12.2 billion prior to the flooding.
The condition of the crop has been rated higher than last year in recent weeks - about 66 percent good to excellent - mainly the result of ideal growing conditions over the past month.
The August crop report is significant because it is the first of the year based on actual visits to farm fields and interviews with growers. The report will be released at 7:30 central time Tuesday morning.
The words from Environmental Protection Agency Stephen Johnson Thursday were music to the ears of the corn and ethanol industries.
“Today, EPA has denied a request submitted by the state of Texas to reduce the nationwide Renewable Fuels Standard,” Johnson said. “As a result, the required total volume of renewable fuels, such as ethanol and biodiesel, mandated by law to be blended into the fuel supply will remain at nine billion gallons in 2008 and 11.1 billion gallons in 2009.”
According to EPA’s justification for the decision, “implementation of the RFS would have no significant impact in the relevant time frame (the 2008/2009 corn season), and the most likely result is that a waiver would have no impact on ethanol production volumes in the relevant time frame, and therefore no impact on corn, food, or fuel prices.”
EPA also determined that the evidence also indicates that even if the RFS mandate were to have an impact on the economy during the 2008/2009 corn marketing year, it would not be of a nature or magnitude that could be characterized as severe. Even in the modeled scenarios where a waiver of the RFS mandate might reduce the production of ethanol, the resulting decrease in corn prices is anticipated to be small (on average $0.30 per bushel of corn), and there would be an accompanying small increase in the price of fuel (on average $0.01 per gallon in fuel costs). The average increase in corn prices in all modeled scenarios, including scenarios where the RFS mandate would and would not have an impact, was $0.07 per bushel of corn. Such levels of potential impacts from the RFS program do not satisfy the high threshold of harm to the economy to be considered severe.
The Environmental Protection Agency announced today that it would deny a request by Texas Governor Rick Perry to reduce the Renewable Fuels Standard.
EPA Administrator Stephen Johnson says they carefully considered the more than 15,000 comments on the issue and found that “the RFS is not causing economic harm but is strengthening our nation’s energy security and supporting American farming communities.”
Stay tuned for more - the press conference is underway.
Corn growers and ethanol producers are holding their collective breath today as the highly-anticipated decision by the Environmental Protection Agency on whether to grant a partial waiver of the Renewable Fuels Standard will be announced this afternoon.
EPA Administrator Stephen Johnson and Principal Deputy Assistant Administrator Robert Meyers will hold a press conference at noon central to officially answer the request from Texas Governor Rick Perry to cut the RFS ethanol blending requirements by 50 percent after delaying the decision by two weeks due to the massive volume of comments received.
According to the Houston Chronicle, Gov. Perry sent a letter to EPA this week with 55 pages of attachments to Johnson responding “to challenges to his request filed with the environmental agency after the public comment period ended July 23.”
In his letter, Perry acknowledged that corn, diesel and crude oil prices have “retreated” in the past month. But, he wrote, “the fundamental problems adversely affecting our well-being remain and could worsen when those prices begin to escalate again, as they probably will.”
He also pointed to information he got from two “expert” economists who claim that the ethanol mandate “contributes materially to higher diesel fuel and and crude oil prices by suppressing gasoline production,” Perry wrote.
“This view is contrary to what would seem to be conventional wisdom and as espoused by the proponents of the ethanol mandates who claim that ethanol is suppressing the price of gasoline at the pump. But it is true nonetheless.”
Environmental Protection Agency administrator Stephen Johnson issued a statement today saying that the agency will delay its decision on the RFS waiver until early August.
“Given the amount of work that remains to sufficiently answer the Texas request for a waiver from the Renewable Fuels Standard (RFS), it is now clear that a final decision on the request will not be completed by July 24,” Johnson said.
EPA received over 15,000 public comments on the issue and Johnson says it is important for the agency to take sufficient time to review and understand these comments in order to make an informed decision.
“The process remains fair and open and no agreements have been made with any party in regard to the substance and timing of the decision on the waiver request,” Johnson says.
Corn growers from around the country have been in the nation’s capitol this week for the biannual Corn Congress meeting of the National Corn Growers Association.
In addition to setting organization policy, the growers have been electing new members and leaders and visiting with lawmakers. NCGA President Ron Litterer presented Senator Sherrod Brown (D-OH) with the President’s Award this year for his leadership and commitment to reform in the Food, Conservation and Energy Act of 2008. “NCGA cannot thank him enough for helping to take farm policy to a new level by introducing the Average Crop Revenue Election program,” said Litterer.
Wednesday evening, the corn growers met with Speaker of the House Nancy Pelosi at the annual Capitol CornFest reception Wednesday evening on Capitol Hill. In conversations at the reception, she thanked farmers for their strong support of the Farm Bill and the Renewable Fuels Standard (RFS) in last year’s historic energy bill. She is pictured here with NCGA chairman Ken McCauley, NCGA president Ron Litterer and Corn Board member Theresa Schmalshof.
The August USDA crop production report has the corn crop recovering even better than expected. 
The pre-report wagering is expecting that the report will indicate less flood damage to the crop than was originally anticipated in Iowa, Illinois, Missouri and Wisconsin. The average analyst forecast is calling for a crop of 11.94 billion bushels of corn this year - not off too much from the original forecast of 12.2 billion prior to the flooding.
“Today, EPA has denied a request submitted by the state of Texas to reduce the nationwide Renewable Fuels Standard,” Johnson said. “As a result, the required total volume of renewable fuels, such as ethanol and biodiesel, mandated by law to be blended into the fuel supply will remain at nine billion gallons in 2008 and 11.1 billion gallons in 2009.” 
The Environmental Protection Agency announced today that it would deny a request by Texas Governor Rick Perry to reduce the Renewable Fuels Standard.
Environmental Protection Agency administrator Stephen Johnson 
In addition to setting organization policy, the growers have been electing new members and leaders and visiting with lawmakers. NCGA President Ron Litterer presented Senator Sherrod Brown (D-OH) with the President’s Award this year for his leadership and commitment to reform in the Food, Conservation and Energy Act of 2008. “NCGA cannot thank him enough for helping to take farm policy to a new level by introducing the Average Crop Revenue Election program,” said Litterer.
Wednesday evening, the corn growers met with Speaker of the House Nancy Pelosi at the annual Capitol CornFest reception Wednesday evening on Capitol Hill. In conversations at the reception, she thanked farmers for their strong support of the Farm Bill and the Renewable Fuels Standard (RFS) in last year’s historic energy bill. She is pictured here with NCGA chairman Ken McCauley, NCGA president Ron Litterer and Corn Board member Theresa Schmalshof.