Source: NMPF news release
A few months ago, USDA was projecting a record corn crop. However, last week USDA projected a national yield of 155.8 bushels per acre, well below last month's projection of 162.5 bushels and lower than an analysts' average forecast of 159.9 bushels per acre. The 2009 yield was a record 164.7 bushels per acre.
The USDA projected final corn output was at 12.664 billion bushels, down from its September estimate of 13.160 billion bushels and from the average analyst estimate of 12.950 billion bushels.
Today, the Environmental Protection Agency (EPA) partially granted Growth Energy’s waiver request application submitted under section 211(f)(4) of the Clean Air Act. This partial waiver will allow fuel and fuel additive manufacturers to introduce into commerce gasoline that contains greater than 10 volume percent (vol%) ethanol and up to 15 vol% ethanol (E15) for use in certain motor vehicles once certain other conditions are fulfilled.
As a result of both of these announcements in the last week corn, soybean, and soy meal prices have all rapidly increased, causing feed prices to likely be 50% higher than in April. Given current futures prices for feed and milk, National Milk Producers Federation (NMPF) projects milk-feed margins to be lower than they’ve been at any time in the last decade, with a couple of exceptions in 2009.
“This is exactly why we need to pass Foundation for the Future
, including the Dairy Producers Margin Protection Program,” NMPF said today. “Foundation for the Future margin protection was specifically designed to protect producers against unforeseen or excessive feed prices caused by government programs to incentivize renewable energy programs, increases in demand, and/or shortage in stocks or production yield, among other things.
“Shocks to the corn market such as those experienced in the last week are devastating to animal agriculture producers’ bottom line,” added NMPF. “The USDA report lowering corn production last week and the EPA announcement of E15 today solidify the need for Congress to seriously consider dairy policy reform as soon as next spring when the 112th Congress convenes.”