Reviewing USDA's 2013 corn, soybean data
The USDA’s Interagency Commodity Estimates Committees prepared projections for the 2013-14 U.S. marketing year for corn and soybeans (as well as other crops) were presented at the USDA’s 2013 Agricultural Outlook Forum on February 22.
Under the assumption of normal spring and summer weather conditions, the projections for both crops reflect expectations of much larger U.S. production, increased consumption, larger year-ending stocks, and lower prices than experienced during the current marketing year. The projections are consistent with our expectations, with some minor exceptions.
For corn, the USDA expects planted acreage at 96.5 million, only 700,000 less than the large acreage of a year ago. Acreage last year was bolstered in part by record early planting and less than the normal amount of prevented plantings. A more normal spring this year might result in fewer corn acres in favor of soybean acres. The acreage projection is lower than most private projections as it assumes some decline in total crop acreage, but captures the general expectation of large corn acreage. Almost regardless of planted acreage, acreage harvested for grain is expected to be larger than harvested in 2012. The difference between planted and harvested acreage (acreage harvested for silage or abandoned) was an abnormally large 9.8 million acres in 2012. With more normal weather, that difference would likely be in the range of 7.2 to 7.8 million acres in 2013. The USDA projects a difference of 7.7 million.
Based on a model estimated over the period 1988 through 2012, the USDA projects the 2013 U.S. average corn yield at 163.6 bushels per acre. The model incorporates trend, planting progress, and summer weather variables to explain average yield. The 2013 projection assumes normal planting progress, no extreme June dryness, and average summer weather. The forecast is higher than most other forecasts, including ours. Using a longer time period, and the application of a different weather model, our analysis points to a 2013 yield near 160 bushels.
A record large corn crop, near the USDA projection of 14.5 billion bushels, is consistent with our expectation. The projection of a very modest increase in corn used for ethanol and a return to more normal (larger) exports is also consistent with our expectations. The USDA projects a sharp increase in feed and residual use of corn, to a 6-year high of 5.4 billion bushels. The projection assumes an increase in livestock production, a more favorable wheat-to-corn price ratio and an increase in residual (unexplained) use of corn due to the large crop size. The forecast exceeds our expectation. Even with that large forecast, year-ending stocks as a percentage of consumption are projected at 7-year high of 16.7 percent. The marketing year average farm price is projected at $4.80, down from the $7.20 average expected for the current year. The projection of $4.80 includes the expectation of substantial pre-harvest sales at much higher prices.