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Monday, August 22, 2005

Corn, hay harvest declines projected

by WLJ

— Spike in feed costs possible.
USDA’s National Agricultural Statistics Service (NASS) released a much anticipated crop production report Aug. 12. The report, which projects yields for a variety of crops, held bearish news for livestock producers across the nation.
Crop estimates for corn and hay, two of the most widely used feed inputs for producers, lag behind previous year harvest levels.
Corn crop yields, which were initially hampered by wet weather during planting season, have also been hurt by record heat and dry conditions across the Corn Belt. The 2005 corn harvest is expected to fall 12 percent below the record harvest level of 2004. Based on conditions through Aug.1, NASS estimated crop yields to average 139.2 bushels per acre, down from an average of 160.4 bushels per acre last year.
NASS estimated the total number of acres harvested in 2005 will rise to 74.4 million acres, one percent more than 2004. Despite the increase in acreage, actual yields are predicted to be lower in 29 of 33 corn producing states. The largest declines are expected in Missouri, Kansas and Illinois.
Extended hot, dry weather across Illinois has lowered yield estimates from 180 bushels per acre in 2004, to 125 bushels per acre this year. That also resulted in a disaster declaration from USDA Secretary Mike Johanns, paving the way to relief payments to producers in the state. Similar yields are expected in Kansas.
Missouri, although less publicized, is suffering much lower yield estimates. The Missouri corn yield in 2004 averaged 162 bushels per acre. This season, the average estimate has been reduced to 99 bushels per acre.
Although the report is considered by many as only a guideline, it provides a glimpse into what corn buyers could be facing come fall and winter. Prior to the report being released, analysts estimated that a yield below 140 bushels per acre would spell an increase in the corn market prices, by some estimates pushing corn to more than $3 per bushel. However, since crop reports were released, corn futures have dropped to $2.14 per bushel by last Thursday, a decline of approximately 16 cents per bushel from pre-report prices. Some analysts speculate that the decline was due to over purchasing by buyers who expected a more pessimistic crop report.
The same environmental conditions that hit the corn crop are also negatively impacting the 2005 harvest estimates for alfalfa and other types of hay. Despite a two percent increase in the number of acres harvested, alfalfa production is expected to decline two percent from last year for an estimated total harvest of 73.8 million tons. Production of other types of hay, where harvested acres have declined by two percent, is expected to decline to 76.1 million tons, down eight percent from 2004 levels.
Across the Intermountain West and central Plains, hay yields have declined for the 2005 growing season due to poorer-than-average growing conditions. NASS noted that North Dakota was the single bright spot for hay yields, where a mild spring and above normal summer precipitation were delaying harvest efforts. However, the report also noted that, at present, harvested yields are running above national levels and exceeding the prior year harvest by more than a half-ton per acre.
Statisticians for NASS surveyed more than 27,000 producers from all sectors of agriculture to compile the report, which will be updated each month through the end of harvest. Early crop reports are generally viewed as preliminary and until harvest, each report carries a varying degree of accuracy based on environmental circumstances.
Cooler, moist weather is anticipated across the central and northern Plains for the next few weeks, and while it may help the last cuttings of hay, it is likely to be too late to affect the corn crop this year, sources said. — John Robinson, WLJ Associate Editor


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© Crow Publications - Any reprint of WLJ stories, except for personal use, without permission, written consent and appropriate attribution is prohibited. 2008 Crow Publications. All rights reserved.