AS CORN CROP CONTINUES TO GROW, PRICES SHRINK EVEN FURTHER

OCTOBER 2014

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(Posted Fri. Oct 10th, 2014)

With the U.S. Department of Agriculture today estimating record corn production of 14.5 billion bushels, 80 million bushels more than previously expected, this coming year, the National Corn Growers Association is fighting back against efforts that would reduce demand for the abundant supply and further lower the prices farmers receive.

 

“With a record crop on the way and prices continually sinking, it is critical our federal policymakers do not cut into the ethanol standard, impose undue regulations or go slow on trade agreements,” said NCGA President Chip Bowling. “America’s farmers are doing our part, working hard and smart on their farms to bring in a good crop. It is critical for Washington to remove obstacles and clear a path now so we can sell America’s biggest and most versatile crop at a good and fair price.”

 

In its crop production and supply-and-demand reports released today, USDA estimated a record average national corn yield of 174.2 bushels per acre, 2.5 bushels per acre higher than last month’s estimate. Factoring in 83.1 million acres expected to be harvested, a 700,000 acre reduction from the previous month, brings the 2014 crop at 14.5 billion bushels and the overall supply at 15.7 billion bushels, up 129 million bushels from the month prior.

 

While the acreage planted and harvested were both decreased by 700,000 acres, beginning stocks were raised by 55 million bushels from the previous report.

 

Due to the increased production, the average farm price was lowered 10 cents on both ends from its September estimate, to a range of $3.10 to $3.70 per bushel. The last year in which U.S. corn prices averaged near $3.40 per bushel was 2009.

 

Notably, the report did increase estimated corn use by 50 million bushels as demand from the feed and residual demand estimates increased by the same amount. This revision came in light of increased corn and livestock production estimates and the decreased corn price forecast. Ending stock estimates were again increased. The current projection sits 79 million bushels higher than that issued in September at well over two million bushels.

 

Bowling noted that NCGA continues to monitor two particular situations in an effort to ensure further reductions to the price paid to corn farmers for their crop do not fall further. First, the U.S. Environmental Protection Agency proposed cutting the amount of corn ethanol in the Renewable Fuel Standard for 2014 by 10 percent. This action could set a precedent for further reductions in subsequent years.  

 

At the same time, EPA has proposed new regulations regarding the Clean Water Act and the definition of which waters will be covered. Farmers need clarity and the proposed rule regarding “Waters of the U.S.” needs to be fixed. Farmers cannot afford more regulatory uncertainty that drives up costs, Barbre said.

 

To view the full report, click here.