Increases to U.S. corn acres, both planted and harvested, led to higher production and thus lower price forecasts in the Department of Agriculture reports released today. Despite a 30-million-bushel overall increase in demand, corn price forecasts for the 2016/2017 crop year fell ten cents to $3.40 per bushel.
“While NCGA is pleased with increased demand from the export sector, it is evident that far greater gains must be made in generating additional demand from all sectors if we are to ensure the continued profitability of U.S. family farmers,” said National Corn Growers Association President Chip Bowling, a farmer from Maryland. “To grow these markets, farmers need the help of our federal legislators and regulators. Farmers need the EPA to step up and comply with its statutory obligations under the Renewable Fuel Standard. We need Congress to help us push export demand even further by opening new markets by passing the Trans-Pacific Partnership and lifting the Cuban Trade Embargo. We must work together to generate the demand America’s rural communities and farm families need to thrive.”
This report projected increased export forecasts by 100 million bushels to 2.05 billion bushels. If realized, this would be the first time U.S. corn exports have exceeded two billion bushels since 2007/2008. This increase, in large part, reflects decreased competition by Brazil, for which USDA reduced old crop export estimates by 157 million bushels. This increase was, in large part, offset by decreased demand in the ethanol and feed sectors. Overall demand forecasts were thus only raised by 30 million bushels.
Both the number of planted and harvested acres were changed in light of the information released in the acreage report last month. With an additional 500,000 acres planted and 700,000 acres to be harvested, production forecasts increased despite steady yield forecasts. If achieved, corn production would set a new record at 14.5 billion bushels. Notably, the ending stocks forecasts was increased by 73 million bushels.
The 2016/17 season-average corn price received by farmers fell and is now projected to be between $3.10 to $3.70 per bushel.
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