Derecho blows away expectations of a record-setting U.S. corn crop
The windstorm that blasted across Iowa — “basically a 40-mile-wide tornado,” in the words of Governor Kim Reynolds — wiped out 9% of the crop in the nation’s No. 1 corn state and obliterated the chances for a record-large corn harvest nationwide, said the USDA. Farmers will see notably higher season-average prices for the smaller, but still ample, crop that remains in the field.
Now forecast at 14.9 billion bushels, the corn crop would be the second-largest on record and would be worth $4.75 billion more at the farm gate, selling for an average $3.50 a bushel, than the record-large crop forecast a month ago that was expected to fetch $3.10 a bushel, according to USDA data. The smaller crop would prevent a burdensome expansion of corn supplies although the U.S. inventory would increase somewhat.
By itself, the August 10 derecho in Iowa caused enough damage to prevent a corn production record this year. The USDA lowered its estimate of the Iowa crop by 9%, to 2.483 billion bushels, in the monthly Crop Production report, and said 550,000 acres were lost in the storm, which packed winds exceeding 100 mph. “Many producers indicated they were still finalizing decisions regarding some of the impacted areas,” said the USDA, so it will check in October to see if losses have expanded.
Hot and dry weather in the western Corn Belt also lowered prospects for the crop, but Iowa accounted for 254 million bushels of the 378-million-bushel reduction by USDA in the corn forecast. The record U.S. corn crop was 15.148 billion bushels in 2016.
Despite the markdown of the U.S. crop, world corn production is forecast at a record in 2020/21 of 1.162 billion tonnes, said USDA in its WASDE report. Brazil, second to the United States as a corn exporter, was forecast to grow its largest crop ever, 110 million tonnes, allowing it to expand sales to 39 million tonnes, a 5 million-tonne increase from 2019/20. By comparison, U.S. corn exports are forecast at 59 million tonnes in 2020/21, up more than 14 million tonnes from 2019’s weather-shortened crop, said the companion World Agricultural Production report.
The USDA also lowered its forecast of the soybean harvest, pegging it at 4.313 billion bushels, the third-largest soy crop ever. Before the 112-million-bushel reduction, the soybean crop was expected to be a hair’s breadth smaller than the record crop of 4.428 billion bushels of 2018.
Futures prices for corn and soybeans rose after the release of the USDA estimates on Friday. Corn for delivery in December ended the day at $3.68¼ a bushel, up by 3½¢, and November soybeans closed at $9.96 a bushel, a gain of 18½¢.
Corn and soybeans are the two most widely planted crops in the country and, with wheat, form the foundation of the food supply. The crops are used in livestock rations and as ingredients in an array of foods as well as having industrial uses such as biofuels.
Cotton, soybeans, and corn are forecast to record their highest yields per acre ever — 910 pounds for cotton, 51.9 bushels for soybeans, and 178.5 bushels for corn, despite downturns from August prospects. The cotton crop was estimated at 17.1 million bales weighing 480 pounds apiece, down 1 million bales from August due to lower yields and smaller harvest area.
The USDA trimmed slightly its forecast of red meat and poultry production this year due to smaller pork and chicken output, but production in 2020 of 106.3 billion pounds would be 1 billion pounds larger than in 2019. Production was forecast to climb to 107.35 billion pounds in 2021, rather than the previous estimate of 108 billion pounds, in the face of lowered expected beef, pork, and broiler chicken output.
On a per-capita basis, U.S. meat consumption this year, at 224.1 pounds, would be 0.3 pounds below 2019. It would drop to 223.9 pounds per person in 2021. Coronavirus outbreaks at packing plants reduced meat production last spring.
The Crop Production report is available here.
To read the WASDE report, click here.