With corn production estimates stable at 13.6 billion bushels in the 2015/16 season, farmers can still expect an average price of only $3.65 per bushel according U.S. Department of Agriculture reports released today. While all production data remained stable, demand estimates were revised to reflect newer information showing increases in the ethanol sector and decreased exports.
“We produce an abundant crop in a sustainable manner and, rightfully, are proud of doing so,” said National Corn Growers Association President Chip Bowling, a farmer from Maryland. “It is time that our regulators and representatives in Washington, as well as their constituents back home, hear the truth. Corn provides an affordable, clean way to fuel and feed our nation. At NCGA, we will continue to tirelessly work to both have this message heard and build the demand needed to sustain our rural economies.”
Yield projections continue to show a national average of 169.3 bushels per acre, which, if achieved, would be the second highest on record. With all production estimates unchanged since the November report, the ending stocks estimate was revised 25 million bushels higher due to revised demand estimates.
Weekly data from the Energy Information Administration showed stronger-than-expected ethanol production in November. USDA report raised projected ethanol demand by 25 million bushels on this data. Should the forecasts for 2015 and 2016 gasoline consumption in the December Short-term Energy Outlook hold true, it is possible ethanol demand figures could rise in the future despite EPA reductions to the Renewable Volume Obligations under the RFS made at the close of last month.
Increases in ethanol demand estimates were more than offset as export demand was revised down this month by 50 million bushels. This revision reflects both an increase in projected corn exports from Brazil and Canada as well as sluggish sales and shipments of U.S. corn.
Despite overall lower estimated demand, the 2015/16 season-average corn price received by farmers is projected to remain in the $3.35 to $3.95 per bushel range.