Corn farmers are within reach of the largest U.S. crop ever grown, topping the 2014 record by more than 200 million bushels, USDA said in its first projections of the fall harvest. Record-high demand for corn from exporters, food processors and livestock feeders would eat up all but 2 percent of the crop, which is not good enough to prevent a fall in the farm-gate price of corn for the fourth year in a row, to its lowest average price, $3.35 a bushel, in 10 years.
The left-over corn would swell U.S. stockpiles already at the largest level since 2007. Some 2.153 billion bushels of corn will be in storage when the 2017 corn is ready for harvest, according to USDA. “If realized. stocks would be the largest since the mid-1980s; however, the stocks-to-use ratio remains far lower than in those years when domestic support policies ballooned stocks to more than 50 percent of annual usage,” it said. The stocks-to-use ratio for this year’s crop, still being planted, is projected at a moderate 15 percent, or an eight-week cushion.
Just before spring, growers said in a USDA survey they would plant 93.6 million acres of corn, the third-highest total since World War Two. With normal weather and yields, that will result in a crop of 14.430 billion bushels, said USDA. The record now is 14.216 billion bushels.
USDA’s projected corn crop was much larger than expected by most traders. The think tank Food and Agricultural Policy Research Institute forecasts a harvest of 14.1 billion bushels. “We assume one million more soybean acres and one million fewer corn acres will be planted than indicated” by farmers, says FAPRI, because the futures prices for soybeans improved since the March survey. Corn prices will be a bit stronger, averaging $3.48 a bushel for the 2016 crop, in FAPRI’s view.
Like corn farmers, wheat growers can expect lower prices for the fourth year in a row, says USDA, because of burdensome supplies at home and worldwide. The U.S. stockpile is projected for 1.029 billion bushels next June 1, the first time that stocks topped the billion-bushel mark since 1988. Stocks are rising due to a collapse in U.S. wheat exports.
Traditionally the largest wheat-exporter in the world, the United States would trail the EU and Russia in sales of the 2016 crop, USDA forecast. The United States is headed for fourth place in the marketing year that ends on May 31 with exports of 780 million bushels.
This year’s soybean crop was projected by USDA for 3.8 billion bushels, the third-largest crop on record.
Corn, soybeans and wheat are the three most widely grown crops in the country, expected to cover more than 225 million acres this year.