August 12, 2008

USDA predicts larger crop; Nebraska close to a record

The U.S. Department of Agriculture put out its first crop production estimate for the year this morning -- and included acre revisions based on a July survey.

Although planted acreage dropped 300 million to 87.0 million, harvested acres increased 400 million to 79.3 million. When you add in a yield estimate of 155 bushels per acre, that means we'll see a 12.3 billion bushel crop this year -- if realized, that would be the second largest crop on record, behind last year’s 13.1 billion.

Ending stocks were pegged at 1.1 billion bushels -- even though USDA increased corn use for feed (to 5.3 billion) and ethanol (to 4.1 billion). In the past, USDA has over estimated corn for ethanol so that number may shrink.

Nebraska Corn Board executive director Don Hutchens said in a news release that despite a less than favorable spring, producers have seen excellent growing weather this summer, which led to these near-record estimates.

“Corn farmers continue to respond to increased demand for corn by using technology, good management and hard work to meet all food, feed and fuel demands – and these numbers back that up," he said.

In Nebraska, USDA put yields at 163 bushels per acre -- the record is 166. When multiplied by 8.75 million harvested acres, Nebraska corn producers are looking at a 1.43 billion bushel corn crop this year, off just a bit from last year’s record 1.47 billion bushel crop. USDA said 9.0 million acres were planted in Nebraska, off about 4 percent from last year.

That's quite a change from what folks thought would happen about six weeks ago -- and shows what growers can do when given the opportunity. Considering that corn futures have dropped like a rock the last six weeks is this a good time for end users to lock in prices?

For USDA's August 2008 crop production report, click here; for its supply/demand report, click here.

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