Thursday, February 21, 2013

USDA predicts record 2013 corn, soybean crops

USDA predicts record 2013 corn, soybean crops

ARLINGTON, Va. — U.S. farmers are expected to harvest record corn and soybeans crops in 2013 as growers recover from the worst drought to ravage the industry in decades, a top agricultural economist said on Thursday.

Normal spring weather would bring yields back to their recent averages, Joe Glauber, the U.S. Agriculture Department's chief economist, told an audience of lobbyists, agribusiness executives and other officials near Washington. He said improved yields would generate a harvest of 14.53 billion bushels of corn and 3.41 billion bushels for soybeans. A year ago farmers overcame bone-dry conditions affecting much of the country to harvest 10.78 billion bushels of corn and just over 3 billion bushels of soybeans.

The recovery should send prices for most oilseeds and grains sharply lower, providing a much-needed reprieve for livestock, dairy and poultry producers struggling with high feed costs and long-term relief for consumers who have paid more for food at their local grocery store, Glauber said. Corn prices are forecast to average $4.80 per bushel, down a third from the average of the prior year, and $10.50 per bushel for soybeans, a drop of 27%. Wheat is seen declining 11% to $7 a bushel.

A record corn crop in 2013 should improve ethanol production margins and lead to more output. USDA estimated 4.675 billion bushels of corn going toward producing ethanol, an increase of 175 million bushels from 2012, but down from 2010 and 2011 when more than 5 billion bushels went to produce the fuel. U.S. ethanol producers were forced to scale back output and about a half dozen plants shuttered altogether, taking millions of gallons of ethanol out of production.

Glauber said growth in ethanol will likely be stunted during the next few years by less gasoline consumption, already high penetration rates of the corn-based fuel in motor fuel and fewer opportunity for exports.

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