Sep 17, 2014
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Twin Corn Ears Push U.S. Yields to Bin-Busting Crop

August 1, 2014
2014 corn college twin ear
  
 
 

The second ear of corn emerging on stalks across Pat Solon’s 1,600-acre farm in Illinois is the latest sign that the U.S. crop this year will be a bin-buster.

"It’s the healthiest crop I’ve ever grown," Solon, 50, said from his farm in Streator, Illinois. Two months before the harvest, stalks exceed 10 feet (3 meters), with deep roots and ample soil moisture. "It’s been a great growing season."

This year’s bumper corn crop is so unusual, Solon predicts he’ll yield 250 bushels an acre, 24 percent more than the average over the past decade. Iowa, the biggest corn-growing state, probably will produce as much as 2.8 billion bushels, topping the all-time high from 2009, Agriculture Secretary Bill Northey said. U.S. production will set a new record of 14.5 billion bushels in 2014, AgResource Co. estimates.

Two years after the worst U.S. drought in a century cut output and sent prices to the highest ever, rain and milder weather of the past two months are creating ideal growing conditions. That’s caused prices to tumble and costs to fall for buyers including Tyson Foods Inc., while it has reduced returns for growers to a four-decade low, a threat to the 12-year jump in farmland values.

"I don’t know how much better the crop can get," Paul Christopher, the chief international strategist at Wells Fargo Advisors LLC, which manages $1.3 trillion, said by telephone from St. Louis yesterday. "We will have a supply surplus this year. The price trend is lower for the next six to 12 months."

Price Slump

 Corn plunged 14 percent in July on the Chicago Board of Trade, the biggest monthly drop since September 2011, and traded at $3.6725 a bushel at 11:48 a.m. in Singapore. The Bloomberg Spot Commodity Index of 22 raw materials fell 5 percent last month, while the MSCI All-Country World Index lost 1.3 percent. Bloomberg’s Treasury Bond Index slid 0.1 percent.

As recently as July 11, the U.S. Department of Agriculture was expecting output to fall 0.5 percent from last year’s record harvest to 13.86 billion bushels, as a 4 percent drop in planted acres eroded the benefit of record yields forecast at 165.3 bushels an acre.

Crop conditions are the best in a decade for this time of year, government data show, with 75 percent rated good or excellent as of July 27. The USDA probably will boost its production estimate in its monthly crop report on Aug. 12, said The Linn Group, a broker and adviser. The U.S. is the world’s largest grower and exporter.

"There will not be enough storage space for all the extra bushels this fall," said Roy Huckabay, an executive vice president at The Linn Group in Chicago. He predicted on July 1 that the crop would increase 2.8 percent to 14.314 billion bushels with yields around 170 bushels an acre.

Weather Risk

 A prolonged dry spell, damaging winds or early frost could hurt crops before the harvest, which usually doesn’t start in the Midwest until late September. Low prices also are encouraging more demand from livestock producers that reduced their herds after a 2012 drought cut output and sent futures to a record $8.49.

Tyson Foods, the largest U.S.-based meat producer, expects the hog supply to increase by about 2 percent next year, with herds expanding into 2016, Chief Executive Officer Donald J. Smith told analysts on a conference call July 28.

The company, based in Springdale, Arkansas, reported record third-quarter profit, aided by lower feed costs as grain prices fell. Tyson forecast rising meat production in 2015, with the chicken unit, the company’s biggest, seeing feed costs declining by $400 million.

Demand Increase

 Global corn use will rise 1.8 percent to 966.3 million metric tons in the 12 months that start Oct. 1, after increasing 9.7 percent a year earlier, the USDA said July 11.

U.S. production of ethanol, made from corn, rose to 29.04 million barrels in May, up 6.8 percent from the same month in 2013 and the highest since December, U.S. Department of Energy data show.

Money managers have cut their bets on price gains in 10 of 11 weeks through July 22, and are the least bullish since February, U.S. Commodity Futures Trading Commission data show. Aakash Doshi, a vice president at Citigroup Inc. in New York, said in a July 28 report that corn futures will "flirt below" $3.50.

The bearish outlook is being fueled by signs of improving yields.

While most plants in the Midwest are designed to produce just one 6-inch ear with about 500 kernels, some are sprouting a second one.

‘Very Big’

 "If you have a second ear, it means that first ears will be very big," Iowa’s Northey, who farms 600 acres near Spirit Lake, said in a telephone interview from Des Moines. "We are going to have a lot of fields in Iowa in excess of 200 bushels an acre."

Ears produced in Iowa probably will average 7.5 inches to 8 inches long, with 18 rows of 40 kernels each, or about 720 to 750 kernels, the most ever, said Todd Claussen, director of agronomy at Ames-based Farmers Cooperative Co., the largest member-owned grain elevator and farm-supply company in the state.

Some of the first ears on the Illinois farm that Solon’s great, great-grandfather bought in 1848 are already 9.5 inches, with some second ears around 8 inches. "Those second ears can add another 20 bushels to my yield," Solon said.

Corn yields for fields sown with non-genetically modified seed are also headed for records in parts of Illinois, the biggest grower after Iowa.

Joe Zumwalt, 36, who grows corn on about 900 of his 1,600 acres near Warsaw, Illinois, said the second ears on his fields will help boost yields to 250 bushels an acre. Unlike most U.S. corn fields, his were grown with seeds that aren’t genetically modified.

"That second ear is important, but Mother Nature is the reason for big yields this year," said Zumwalt, who will sell half his crop this year to Kirin Holdings Co. in Japan. "The big yields will make up for the low prices."

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COMMENTS (2 Comments)

jpdoc - bricelyn, MN
Every year someone starts crowing about two ears per stalk. The second one will dry up to nothing unless you planted your corn way too thin or in hills with a wire check planter. I agree we have a good crop, but enough with the hype about two ears. P.S. last year we had a field that had a lot of stalks with 2 ears. It occurred in spots where most of the corn rotted out and left a single stalk standing with nothing around it for 20 feet. That field went 113 bu. Bloomberg knows nothing.
11:29 PM Aug 7th
 
maturewind
I always have to laugh when the comments about two ears on every stalk start to show up. You know the comments come from noted farming experts such as Bloomberg, or possibly a Farmville farmer, or least likely a real farmer who has never ventured past the outside row. Okay, we get it. It's going to be a great crop, but second ears will be an insignificant part of it!!!
9:33 AM Aug 7th
 



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