Iowa Public Television


USDA Predicts Record Corn, Beans and Cotton Harvests

posted on October 15, 2004

Hello, I'm Mark Pearson. Despite soaring energy costs and a questionable outlook for jobs, shoppers are opening up their wallets.

The Commerce Department reported this week that retail sales, which account for two-thirds of all domestic economic activity, grew by a robust 1.5 percent last month. It's best showing since March.

The Core Producer Price Index, a gauge of prices received by farms, factories and refineries rose three-tenths of one-percent in September -- suggesting that manufacturers are finding it difficult to pass higher production costs on to consumers.

But, the government also announced this week that the U.S. trade deficit ballooned to $54 billion last August -- up nearly 7 percent from July.

U.S. agriculture is a bright spot in the overall trade picture, enjoying a surplus. And that's particularly good news this year, as America's farmers continue a record-breaking harvest.

USDA Predicts Record Corn, Beans and Cotton Harvests The U.S. Department of Agriculture updated its monthly crop production report this week -- predicting once again, the largest crops in history.

Initial reactions were reflected in lower prices, with soybeans showing the biggest response to the report. On Tuesday, the day USDA released the report, the November Soybean futures contract declined by 26 cents to close at $5.13 per bushel. December Corn futures on Tuesday fell two-and-a quarter cents and closed just above 2.00.

USDA pegged 2004 corn production at a record 11.6 billion bushels, which is 15 percent larger than last year. Private forecasts last week for the corn crop averaged 11.3 billion bushels.

Soybean producers are expected to harvest a record 3.1 billion bushels -- up 27 percent from last year. Private estimates had forecast soybean production right at 3 billion bushels.

Cotton production is forecast at 21.5 million 480-pound bales, up 3 percent from last month and 18 percent above last year's crop.

With each passing month the supply of grain, oilseed and fiber rises and the October reports were higher than expected. That usually leads to even larger reports in November.

While the numbers clearly show an increase in supply, the demand side of the equation remains unclear. And will have more on demand in our market discussion later in the program.

Tags: agriculture corn cotton crops government markets news trade USDA