National Corn Growers Association President Garry Niemeyer released the following statement in response to the U.S. Department of Agriculture reports released this morning which further decreased the estimated U.S. corn production in 2012.
“Farmers across the country are coming to grips with the full impact of this devastating drought. The August USDA crop report confirms our concerns that corn production may be several billion bushels less than previously anticipated, due to a summer heat wave which kept temperature well above normal and offered only sporadic rain.
“Our nation’s farmers have done all they can to increase the corn supply, planting the most corn acres our country has seen since 1937 this year. Thankfully, this additional acreage and innovative agronomic practices will make an important difference, and we remain hopeful that above average yields in some areas will further augment the crop. At the same time, we recognize that it will not fully cover yield concerns.
“Without advanced seed technology, including biotechnology and new genetics which help corn plants use water more efficiently and better tolerate extreme heat and other drought conditions, production losses would be much greater.
“Many of our farmer members are suffering immensely from the drought. Many are also in the same predicament as our customers because they have livestock or own ethanol plant shares. Now is the time for all of American agriculture to pull together and work together for solutions that benefit us all. NCGA offers the following recommendations to that end.
“First and foremost, we must maintain a level perspective when looking at the situation facing us today. Looking at similar points in our past, we see that, in the long run, the market works. While speculators aiming for personal gain and emotionally charged decisions may drive corn prices beyond justifiable levels in the short term, these factors will subside. As it always has, the market will correct and continue to effectively allocate the corn supply for our various customers.
“Likewise, it is crucial that we maintain this sort of calm, rational perspective when examining the impact that corn actually has on the food prices paid by average Americans. Corn remains an incredibly small portion of the price paid for groceries and provides a relatively inexpensive, quality ingredient used to make the affordable, nutritious foods we enjoy. While the price of corn may be higher than it has been historically, the amount of corn in a box of corn flakes still only costs about 12 cents, and only 37 cents’ worth of corn is needed to produce a pound of hamburger. USDA projects the total impact of the drought on retail food prices to be less than one percent.
“Additionally, we ask that all parties maintain perspective when looking at how we might allow the drought to impact our nation’s biofuels policy. NCGA stands firm in our support of the Renewable Fuel Standard. At the same time, we support the waiver process that is embodied in the current RFS, and ask that any parties who would seek RFS changes do so in this manner, rather than through legislation.
“With most of the crop still in the field and thus the most accurate corn supply estimates still outstanding, we think that it is still somewhat premature to consider a partial waiver of RFS provisions. In addition, recent analysis suggests that the current need for octane in gasoline is driving ethanol demand, rather than the RFS. Corn going for ethanol use, about one quarter of total corn supply, is subject to the same market forces that all customers of corn are currently facing.
“Finally, what farmers and ranchers are experiencing clearly demonstrates the pressing need for Congress to pass a farm bill this year. The crop insurance and risk management tools authorized in this legislation provide critical assistance to crop and livestock farmers when they face losses due to drought and other adverse weather conditions, crop disease or volatile markets. The Senate and the House Ag Committee have already done their job, and we thank them for that. In light of the evolving situation, we strongly urge the Speaker of the House to get the farm bill on the House floor for an open debate and quick vote.