St. Louis, Missouri
May 9, 2008
The U.S. Department of Agriculture
today released its monthly
World Agriculture Supply and Demand Estimate (WASDE), which
included the first estimate of the 2008-09 corn crop, the
National Corn Growers Association
notes.
USDA is projecting 86 million
acres of corn will be planted this year, of which 78.8 million
will be harvested. USDA also forecasts 153.8 bushels per acre
yield, which is based on trend-line yields. The estimate
projects production of 12.1 billion bushels, 7 percent lower
than the record 2007-08 crop.
“The lower acreage number is
based on USDA’s earlier forecast from the Prospective Plantings
report, and it’s important to note that producers are in the
field now planting corn to meet the market needs,” said NCGA
President Ron Litterer. Revised crop acreage estimates are
expected in June.
“It’s also important to note
skyrocketing input costs, such as fertilizer and diesel fuel,
has tempered corn acres.”
On the demand side, USDA is projecting feed and residual use
will decline to 5.3 billion bushels. Increased distillers dried
grain feeding and substitution of other feedstuffs will
compensate for a significant portion of the reduced corn usage,
although a modest reduction in red meat production is also
projected.
Exports to foreign markets are
also projected to decline from the 2007-08 record. “We have
seen corn farmers in other countries like Argentina, Brazil and
South Africa have responded to higher commodity prices and
expanded production,” said Litterer. “This will increase the
global supply of coarse grains ensuring continued availability
for world markets.”
USDA projects ethanol
production will continue to expand to meet U.S. fuel demand, but
it notes that plant construction and expansion has begun to slow
down.
Finally, based on these
production and demand projections, USDA is forecasting a 763
million bushel carry-out for the coming crop. This is the
amount of corn that will be left over at the end of next year
after all uses have been met.
The USDA average price for corn
next year is estimated at $5.50 per bushel, up from the current
$4.25. |
