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USDA: Corn, Soybean Forecasts Rise

posted on September 16, 2005

From harvesting and hauling to propane for drying grain to fertilizer for fall application, fuel-related costs for farmers can really spike in the fall. That's why harvest time is the worst time for rising energy prices.

By some estimates, 60 percent of the fuel costs for corn production occur at harvest. That explains why the 2005 estimate for overall cost of production on an acre of corn has jumped by $14. For cotton, it's some $29 an acre more.

Those are worrisome numbers, especially given a USDA report this week that showed the crops that farmers are spending more to harvest are hitting the bins in price-depressing amounts.


USDA: Corn, Soybean Forecasts Rise

USDA's September crop projections were anything but friendly to prices. In fact, the government's estimated harvest totals exceeded trade guesses for most major U.S. farm commodities.

The forecast for corn production was increased 289 million bushels over the August guesstimate to 10.64 billion bushels. The average yield for corn was pushed from 139 bushels an acre to 143 bushels.

The prediction for the soybean crop was upped some 65 million bushels from last month to 2.856 billion bushels. Yields for soybeans were increased by nearly a bushel an acre.

And despite the ravages of Hurricane Katrina, USDA is predicting a 5 percent increase in cotton production over its August estimate. Production of all types of cotton is forecast to reach 22.3 million bales, the second highest total on record.

The larger-than-expected harvest is raising concerns over storage. Analysts said plentiful supplies of old crop remain unsold ... and, with the exception of wheat, ending stocks for the current marketing year will increase ... putting further pressure on prices.


Tags: agriculture corn crops markets news USDA