(Posted Tue. May 10th, 2016)
The U.S. corn industry may see record demand in 2016 along with record production according to U.S. Department of Agriculture reports released today. With increased demand in the feed, ethanol and export sectors, corn use is projected to see a new high at 14.1 billion bushels in 2016/17.
“NCGA is pleased to see continuing demand increases in the ethanol, feed and export sectors in the report, but this report shows us that we need to work even harder,” said National Corn Growers Association President Chip Bowling, a farmer from Maryland. “We are working to increase the availability of ethanol, but we need help in growing demand. We need the EPA to comply with their statutory obligations under the Renewable Fuel Standard and we need Congress to open new trade markets by passing the Trans-Pacific Partnership and lifting the Cuban Trade Embargo. Each of these may be small steps in growing demand, but taken together, these actions will make a difference for farm families across this country.”
This report, the first forecasting overall U.S. corn supply and demand for the next marketing year, projected feed and residual use to increase 300 bushels from the previous year due, in part, to continued livestock industry expansion. Corn used to produce ethanol is also estimated to top the prior year by 50 million bushels due to both a slight reduction in the use of sorghum as a feedstock and higher than expected blending levels. In addition, USDA is projecting U.S. corn exports to increase by 175 million bushels next year.
At the same time, U.S. corn farmers could set a new production record in 2016/17 if the 14.4 billion-bushel level forecast is achieved. Current forecasts show this record production in spite of a lowered national average yield estimate of 168 bushels per acres, down three bushels per acre from the record set in 2014.
Ending stocks are expected to reach 2.15 billion bushels, the highest level in more than two decades. The 2016/17 season-average corn price received by farmers is projected to be between $3.05 to $3.65 per bushel.
“While we’re excited about the continued growth in demand, the forecast for record demand increases is more than offset by the estimated increases in production” said Bowling. “If we don’t work together to build demand, the next U.S. President may inherit a rural economic crisis that mirrors the struggles of the 1980s.”
For the full report, click here.