U.S. blames fewer corn crops partly on Midwest flooding
U.S. farmers will harvest about nine per cent fewer hectares of corn this year than last year, in part because of Midwest flooding that has damaged a portion of the crop, the U.S. Department of Agriculture reported Monday.
But farmers planted more than 400,000 hectares of corn than they had expected to plant in March, the latest USDA figures showed. Corn futures prices fell in the wake of Monday's report.
The USDA said farmers expect to harvest 31.6 million hectares of corn, down 8.7 per cent from the 34.6 million harvested last year.
The report also indicates farmers planted nearly seven per cent fewer acres of corn than last year — 34.9 million hectares versus last year's 37.4 million hectares.
But the hectares planted was still higher than the 34.4 million hectares that farmers had anticipated planting in corn when asked about it in March.
Grain analyst Dan Basse, president of Chicago-based AgResource Co., an agricultural consulting firm, said high corn prices encouraged farmers to find more land to plant corn.
Even with the anticipated reduction in harvested hectares caused by flooding, Basse said a robust corn harvest could soften corn prices.
"They'll weaken with time," he said, adding he didn't see an economic reason why new crop corn futures will rise above $8 US a bushel unless there's a drought.
Corn futures, which were about $6 US a bushel in early June, dropped nearly 30 cents US to about $7.25 US on the Chicago Board of Trade.
Will be enough to meet needs: association
An ethanol industry trade group, Renewable Fuels Association, said the anticipated corn harvest will be enough to satisfy projected needs.
The group said it estimates a harvest of around 11.5 billion bushels, meeting projected demand and leaving about 800 million bushels left over. The USDA said about four billion bushels of corn remains in the nation's stockpiles.
Chad Hart, an agriculture economist with Iowa State University, said the report shows that farmers planted more corn than they had anticipated but some of it was washed away in the floods.
"What it means in terms of flooding impact on the area is, I hate to say it, that it was kind of a wash," Hart said. "Farmers were able to get in there and plant more corn but a lot of the surplus planted over March intentions was basically washed away by the floods."
The USDA report said spring rainfall totalled 50.8 centimetres or more from eastern Oklahoma into the lower Ohio Valley, disrupting planting and other spring field work. That is at least 150 per cent above normal levels.
"Unfavourable wetness also covered much of the Midwest, hampering corn and soybean planting efforts," the report said.
The planted hectares decreased in the 10 major corn producing states — Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin — in part because of high fertilizer prices, favourable prices for other crops and a return to normal crop rotation, the USDA said.
Despite the reductions, the planted hectares are still the second highest since 1946, behind last year.
Harvest hectares, if realized, will be the second highest since 1944, the USDA said.
The report says farmers have changed planting intentions for crops already planted and changed intentions for hectares not planted.
Farmers intend to harvest 90.4 per cent of their planted hectares of corn for grain, down from the estimate of 92.4 per cent as indicated in the first two weeks of June.
Hart said land that had been intended for other crops or that may have recently come out of the conservation reserve program were likely planted with corn, resulting in the uptick from earlier expectations.
The USDA reinterviewed 1,200 farmers last week to get the most updated information reflecting the impact of Midwest flooding.