Views from USDA’s Outlook Forum

February 21, 2013 11:59 PM

via a special arrangement with Informa Economics, Inc.

Lots of focus on 2013 prospects, with a weather overlay

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

Optimism on 2013 US production prospects is there, but there is also a cautious eye on the sky from attendees at USDA’s annual Outlook Forum held near Washington, DC.

Attendance: Indications are some 1,800 to 2,000 folks registered to attend the conference. Last year saw 2,000 or more and USDA actually had to cut off registrations due to constraints at the current facility. Also, contacts noted that there were fewer "no shows" of those pre-registered.

Key: The current cost squeeze that has hit some areas of the US economy hasn’t engulfed all sectors of agriculture, but those who ponied up the money to come to the conference felt they had to attend after their financial commitment.

USDA diversity program: The annual effort to get college-age students interested in agriculture again had 30 attendees from universities and colleges around the country. But their study focus has shifted as many were in areas with an environmental or food safety focus.

Key: Only one of the 30 students attending was majoring in ag economics, prompting some to wonder where the next generation of analysts for agriculture will come from.

Acreage focus mostly on corn: The 96.5 million acre planted area projection for corn delivered by USDA Chief Economist Joe Glauber was a surprise to some, but others countered that even though that was closer to the low end of where most are, it still was not too troubling of a figure.

Key ahead: Weather. That will be the arbiter of whether the acreage figure will be a surprise or not. And while there is concern about the drought/dryness situation in the western Corn Belt in particular, today’s genetics have many observers convinced that just-in-time rains can deliver a crop that keeps most usage categories well provided for.

Ethanol use a surprise: One analyst noted he was puzzled about the corn for ethanol figure released by Glauber of 4.675 billion bu. for the 2013/14 crop year. "I’ve been carrying 5 billion bushels, so this is a surprise," the analyst noted. Glauber cited lower gasoline use, ethanol not expanding beyond the 10 percent blend very quickly and expectations exports will be tempered to the European Union and Brazil.

Key: Rebound in the U.S. corn crop, which is of course driving most of the recovery in demand categories.

U.S. corn yield: This question will be answered today but there was lots of hallway chatter on this topic as well. Some were unrealistically high at 167 bu. per acre while others noted Glauber’s reference to "normal" yields as after the last three years, no one is quite sure what "normal" is.

Key: Weather ahead will, as with acreage, be the major factor.

Politics: USDA Secretary Tom Vilsack was clearly in political mode as he went through the "man-made" risks facing US agriculture, spending considerable time on the sequester cuts that loom. The post-presentation press conference was also marked with a focus on the sequester cuts, at times irritating the USDA chief.

Key: Contacts agree that there are likely avenues that can be taken to avert the food inspector furloughs that Vilsack keeps warning about. Further, sources whisper that even within the administration, there are merely "general" talking points on this topic which they translate into a view that the cuts will somehow be averted. Said one source: "You can’t tell me the Defense cuts couldn’t be taken care of by cutting out one contract instead of these little cuts all across that agency!"


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.






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