More acres and higher yields are expected to lead to a record corn crop this year, USDA analysts say, as higher expected returns are encouraging more producers to opt for corn over soybeans.
“We're forecasting about a 1.5 million-acre increase in corn, with a similar drop for soybeans,” USDA Chief Economist Keith Collins said at the annual Agricultural Outlook Conference at Washington, D.C. “This will happen as a result of relative prices and loan rates that favor corn, plus several years of disappointing soybean yields.”
Peter Riley, agricultural economist for USDA's Farm Services Agency, says preliminary projections point to plantings of 80.5 million acres this year, with an average 139.7 bushel yield, up from 130 last year, and well above the record of 138.6 bushels in 1994. Continued drought in the Midwest states, however, could have a downward impact on the acreage/yield forecast.
The outlook for higher stocks at the end of the 2003-04 marketing year will likely push corn prices 20 cents lower than 2002, to about $2.15 per bushel.
The “big daddy” of growth in the corn sector, Riley says, will continue to be use for ethanol production.
Exports of corn could rise as much as 100 million bushels this year, he says, although there is “a lot of uncertainty,” much of which centers on China, “a big drag” on U.S. sales the last year or two.
Preliminary 2003-04 forecasts by analysts with USDA's World Agricultural Outlook Board, Economic Research Service, Foreign Agricultural Service, and Farm Service Agency point to a 10.27 billion-bushel corn harvest and total supplies at the end of the marketing year of 11.2 billion bushels, up about 600 million.
They expect feed and residual use to increase only slightly, about 50 million bushels, but an improvement over the 275 million-bushel decline last year.