This year’s big corn crop, which is projected by USDA to push the stocks-to-use ratio to almost double what it was a year ago, is the key influence on commodity markets nowadays, says John Anderson, deputy chief economist, American Farm Bureau Federation. But longer term, he said at the annual meeting of the Mississippi Farm Bureau Federation, competition from other corn-producing countries is a factor that growers will have to consider in their cropping plans.

Anderson, who conducts policy analysis and market commentary for AFBF in Washington, says this year’s near 14 billion bushel corn crop is “a really big number,” coming on the heels of 2012’s drought-plagued crop that was 20 percent below the national yield trendline .

“Despite the very late planting, most places in the Corn Belt — where there’s a real potential to have an impact on the corn market — had really good yields, resulting in a big production number nationally.

“That big number is what’s got everyone’s attention and is what’s driving a lot of what’s going on in the row crop markets. We’ve gone through a period when we’ve been playing catch-up in the corn market. We’ve had big runs in demand and it has taken a while to bring production back online.

“But that production is there now, and supply has pretty much caught up with demand, which puts the market in a real transition period.”

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There tends to be a pretty close relationship between stocks-to-use and price, Anderson says. “For a fairly long period of time, we’ve trended down toward very low stocks-to-use levels, 6 percent or 7 percent — historically really tight levels. Response has been pretty dramatic in terms of price.

“At end of 2013-14 marketing year, we’re expecting stocks-to-use to get back close to 15 percent. It’s been a good while since we’ve carried that level of corn stocks.”

But, he says, the global market picture has changed over the last six or seven years, and “I think now a 14 to 15 percent stocks-to-use ratio is going to seem a lot bigger to the market than it would have six or seven years ago.”

While an almost-15 percent stocks-to-use ratio doesn’t look huge historically — there have been years with 20 percent to 30 percent carryover — “things are different today,” Anderson says. “From the market’s point of view, a 15 percent stocks-to-use number is bigger than the same number was five or six years ago.

“One thing we’re going to have to consider in years ahead: We’ve got more people producing larger amounts of corn — since 2005, we’ve had more people coming into the game, not just in the U.S., but globally.

“There has been a pretty dramatic change in the U.S. share of global corn exports, each year going back to the mid-1990s. As recently as 2007, we had almost two-thirds of corn exports globally; last year, we had 20 percent. That was an unusual year, granted, because of the drought, and this year we’ll bounce back to about a one-third share.

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“But still, we’ve gone from having a two-thirds share of the world export market to just one-third. There are now a lot more people playing in that market, more people we’ve got to compete with, more people who aren’t going to stop growing corn just because we have a good U.S. crop. And I think that’s the long-term challenge we’re going to have to face.

“Going back to 2007-08, U.S. corn exports were nearly double those of the next top 10 exporting countries. Now, the situation has basically flipped, and U.S. exports last year were only about half that of the next 10 exporting countries.