Drought withers corn, sparks prices
07/17/2012
Heat and dry conditions forced the US Department of Agriculture to recently lower its estimate for US corn production for this year by an astounding 1.82 billion bushels, according to Southeast Farm Press.
“ … persistent and extreme June dryness across the central and eastern Corn Belt and extreme late June and early July heat from the central Plains to the Ohio River Valley,” led to the USDA’s decision to lower projected US corn yield, according to the publication.
Farmers from Illinois to Wyoming are watching corn and other crops and livestock wither as the most widespread drought since the mid-1950s persists across more than half the US, according to the Christian Science Monitor, which added that higher food prices won’t be far behind.
The USDA said earlier this month that 30 percent of the corn in the 18 states that produce most of the nation’s crop is now considered in poor or very poor condition. A week earlier, it was 22 percent, according to the Associated Press.
Not surprisingly, corn prices have jumped sharply in recent weeks.
The USDA’s corn yield was lowered by 20 bushels per acre, to 146 bushels, reflecting the rapid decline in crop conditions since early June and the latest weather data.
Estimated production in USDA’s July 11 Crop Production report was lowered from 14.79 billion bushels to 12.97 billion bushels, the publication added.
As a result of the reduced supplies and higher prices, corn usage is expected to drop in the coming year.
The biggest reduction is expected to come in the area of feed, but food, seed, and industrial use is also projected lower, down 105 million bushels, mostly reflecting a 100-million-bushel reduction in corn used to produce ethanol, Southeast Farm Press reported.
“Corn exports are projected 300 million bushels lower as tight supplies, higher prices, and strong competition from South American exporters limit U.S. shipments,” it added. “Ending stocks for 2012-13 are projected at 1.2 billion bushels, down 698 million from last month’s projection.”
