USDA predicts record US corn harvestConsumers could see some relief from higher food prices by late fall, if the latest government crop forecast holds up.
By: Sandy Shore, Associated Press
Consumers could see some relief from higher food prices by late fall, if the latest government crop forecast holds up.
The U.S. Agriculture Department predicted Thursday that corn production will total 14.8 billion bushels, with a record yield of 166 bushels per acre. That compares with 12.4 billion bushels a year ago.
It also increased an estimate for corn stockpiles at the end of this August to 851 million bushels from 801 million bushels, noting that some of this year’s crop may be ready for use earlier than normal because of a fast start to the planting season. Corn exports between September and August 2013 were forecast at 1.9 billion bushels. The agency expects more demand from China.
Corn futures prices fell more than 3 percent in May 10 afternoon trading, to about $5.89 a bushel.
The forecast is the first at the beginning of the growing season. Many things could affect the outcome, such as a hot, dry summer.
If the prediction proves true, however, corn prices will fall and that likely will mean lower supermarket prices for products that use corn such as cereal and soft drinks sweetened with corn syrup. Beef and pork prices could fall, too, because producers would pay less to feed their animals.
“This would set the trend for six months from now for prices to be cheaper,” says Jason Ward, an analyst with Northstar Commodity.
Food price forecast
The government has forecast an increase of 2.5 to 3.5 percent in overall food prices for 2012.
Corn stockpiles have been small in the past couple of years because weather-related damage hurt production. In addition, there has been strong demand from livestock producers, ethanol manufacturers and overseas buyers. The combination of strong demand and short supplies has kept corn futures above $6 a bushel for much of this year.
A mild spring and ample moisture allowed farmers to get an early start on planting this year. They are expected to plant 91.9 million acres in corn. That’s the most since 1937.
The Agriculture Department raised its estimate by 12 percent for all-wheat production, totaling 2.245 billion bushels from September through August 2013. That would be the highest level since the 2008 to 2009 season. The yield per acre was forecast at 45.7 bushels.
Wheat supplies have been ample after robust harvests in other countries pushed up global supplies.
Soybean production was forecast at 3.205 billion bushels, with a yield of 43.9 bushels per acre for the year ending in August 2013. Televent DTN analyst John Sanow says soybean supplies will be “critically tight” next season.
Wheat futures were virtually unchanged, while soybean prices rose 1.4 percent in May 10 afternoon trading.
Copyright 2012 The Associated Press.