By the time this issue hits the streets, the 2011 harvest will be in full swing. Elevators in some areas will take in record volumes; others, however, will experience the depleted returns resulting from Mother Nature’s bipolar regional spring and summer weather. With the numbers from the United States Department of Agriculture’s questionably optimistic June 2011 Crop Production report significantly dropping from its original estimates, the commodity market has mirrored this uncertainty.
By today’s estimate, the national average corn yield is forecast to be 148.1 bushels per acre, 16.3 bushels below the 2009/2010 crop year — the lowest since 2005/06.
While yields may not break any records, with corn prices over $6/bushel and soybeans pushing past $12/bushel, the lucky producers who experienced the best conditions are looking forward to a big pay day. In Iowa, according to the Des Moines Register, producers are poised to pull in more than $20 billion — the largest cash harvest in the state’s history.
In contrast, farmers in the Southwest are preparing for a weak second harvest after heat and drought diminished the wheat crop this spring. The crops that did grow were damaged — soybeans, for example never produced pods — many farmers abandoned the fields altogether. In these cases, reliance on federal crop insurance will ease the burden, but will not replace the expected profit.
Consequently, U.S. exports in the coming year will also decrease. The United States Department of Agriculture (USDA) projects total wheat, corn and soybean exports in the coming crop year to sit around 4.09 billion bushels — 12% lower than the 2010/11 crop year. The World Agricultural Supply and Demand Estimates (WASDE) report points to production projections for the new crop of wheat, corn and soybeans to hover around 17.7 billion bushels, a 2% reduction from last year.
As what was a prosperous season for some — and devastating for others — draws to a close, I guess we’ll all have to wait and see where the chips fall. Please feel free to contact me at email@example.com to report your harvest experience this year and how it has impacted your business and the business of your producer customers.