SAN ANTONIO, Texas – About 10 percent of the U.S. corn crop wasn’t harvested last fall, but the country is still expecting its second largest harvest in history at 13.1 billion bushels.
However, the U.S. Department of Agriculture plans to survey corn growers in March, and prices could jump if it finds that the harvested levels were lower than reported, said analyst Mike Murphy of Cattlefax.
Yields are expected to come in at 165 bu. per acre, which is an eight bu. per acre improvement from last year when the total harvest produced 13.7 billion bu.
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“Never in the history of our data have we had back-to-back years with that kind of increase in yields,” he told the National Cattlemen’s Beef Association convention in San Antonio.
Murphy expects yields will decrease to 159 bu. per acre this year, depending on the weather and growing conditions.
World corn stocks may be tight, but the U.S. expects to have about 12 percent carryover. That relieves price pressure, which is good news for the livestock sector.
He said a return to $7 per bu. corn is not expected; spot futures place the price at $3 to $4 per bu.
“We are beginning to define that price range at $3 to $5 per bu. and we hopefully won’t have these big gyrations like we did back a couple years ago,” he said.
He predicted a 2.5 million acre increase in corn plantings this year at 89 million acres. Soybeans will take about 79 million acres and wheat is in decline at 55.5 million acres.
The anticipated increase in corn acres should set the foundation for another large crop in 2010 and keep prices at 2009 levels.
Carryover should be 1.7 billion bu. Exports will hold at about two billion bu. and animal feed should consume about 5.5 billion bu. Murphy said that might change because fewer cattle and hogs are on feed.
Ethanol will need 4.5 billion bu., which could change if the Environmental Protection Agency decides to raise the ethanol blend cap to 15 from 10 percent by August.
An increase would support more ethanol production, but Murphy said a compromise of 12 percent blends may be recommended.
