USDA forecasts U.S. record corn production

National Corn Growers Association (NCGA) reports:

The first round of projections for supply and demand for the 2010 corn crop, released by the U.S. Department of Agriculture, estimates record production of U.S. corn this year, at 13.4 billion bushels.

The report also that acres planted and harvested will rise slightly from last year, with 88.1 million acres planted and 81.8 harvested. Currently, the national average yield is projected to be slightly lower than last year, at 163.5 bushels per acre.

"As planting progress moves along well ahead of the five-year average, farmers look forward to another record growing season," said NCGA President Darrin Ihnen, a grower from Hurley, S.D. "This report confirms what we already know -- our farmers continue to increase production to meet all demands for food, feed and fuel while continually increasing our sustainability as an industry."

This first report for the year projects total U.S. corn use for 2010/11 will be up 2 percent from the current year with higher expected food, seed and industrial use and exports more than offsetting a decline in projected feed and residual use. USDA projects that food, seed and industrial use will be 4 percent higher with a 200 million bushel increase in corn used for ethanol accounting for most of the increase. Corn ethanol use, projected at 4.6 billion bushels, is supported by rising federal biofuels mandates and strong blending incentives that continue to boost ethanol usage.

Exports are projected up 3 percent with larger supplies and lower prices, but rising foreign feed grain supplies, mostly corn, limit export growth in 2010/11. Domestic corn feed and residual use is projected down slightly with a slow recovery in animal numbers and increased use of distillers grains. U.S. corn ending stocks for 2010/11 are projected up 5 percent to 1.8 billion bushels. The season-average farm price is projected at $3.20 to $3.80 per bushel, compared with the 2009/10 forecast of $3.50 to $3.70 per bushel.

The fact that the corn ending stocks has been increasing steadily for five years indicates that concerns about meeting demand, or concerns that using corn for ethanol detracts from other uses, are not realistic, Ihnen noted.

"Ethanol production is an important market for our corn, and its by having growing markets that agribusinesses and growers work together to improve our crop year after year," Ihnen said. "This in the end benefits all uses."

On Monday, USDA reported that the 2010 corn crop is 81 percent planted, 19 points higher than the five-year average. In key corn states such as Illinois, Iowa and Minnesota, planting is nearly complete.