Citing Drought, U.S. Expects Lowest Corn Yield in 17 Years

By RON NIXON

WASHINGTON — This year’s corn yield is projected to be the lowest since 1995, according to an Agriculture Department report that sharply cut production estimates for some major crops because of damage from the nation’s worst drought in 56 years.

The new data raises the possibility of even higher food prices as corn and other crop prices rise to record highs.

The corn yield is expected to be 123.4 bushels an acre, the lowest in 17 years, and corn prices are projected to reach a record $7.50 to $8.90 a bushel, the report said. An earlier report projected about 146 bushels an acre.

After favorable spring weather, United States corn production had been projected to hit a record high, approaching nearly 15 billion bushels, as farmers had planted the most acreage since the late 1930s to capture profits from what were already the highest corn prices ever.

Then the drought set in, projections of a bumper crop evaporated and prices began to climb.

The new corn yield forecast was a bit worse than some private analysts had expected. Analysts had estimated the yield would be around 127 bushels an acre, with a range of 117.6 to 135 bushels an acre.

The report said that soybeans were expected to be 36.1 bushels an acre — 4.4 bushels an acre below last month’s government estimate and 5.4 bushels an acre less than last year. Soybean prices are expected to be $15 to $17 a bushel, the government said.

The report’s data on meats was mixed. Beef and poultry production are expected to increase this year as livestock producers cull or sell their herds because of higher feed cost. Eggs, milk and pork production are expected to decline because of hot weather and feed prices.

The government report provides the most authoritative view yet of the weather damage. The United States is the world’s largest exporter of corn, soybeans and wheat.

The Agriculture Department’s new estimates are based on surveys of farmers and its own experts inspecting fields for the first time since the drought began to rally prices in mid-June.

On Thursday, corn prices rose 1 percent and soybeans rose 3 percent.

Corn futures rose to $8.29 a bushel, the highest price ever for a Chicago Board of Trade corn futures contract and above the previous record of $8.28 that was set by the spot September contract three weeks ago. Many analysts said they expected the prices to go even higher as the drought continues to punish the Midwest and squeeze grain supplies.

NYT