Pro Farmer Extra
- From the Editors of Pro Farmer newsletter
Chatter in the "Twittersphere"
Feb. 25, 2012
The "Twittersphere" was buzzing with comments about USDA's Outlook Forum this week. There are some estimates that really jumped off the page to the Pro Farmer editors: The 2012-13 corn Feed & Residual estimate and the 2012-13 soybean export projection.
That, however, wasn't the number that had the market chattering... that was USDA's projection of a 2012 national average corn yield of 164 bu. per acre. We'll admit that feels high... especially if corn farmers do plant 94 million acres this year. If all of those acres were concentrated in high-yield areas, a 164 bu. national average yield makes sense. But those acres can't be in the high-yield areas and will have to include some lower-yielding acres in the fringe areas of the Corn Belt. That will make it very difficult to hit the USDA projection. From our perspective, that's an estimate that will just take time to be proven either right or wrong.
The corn Feed & Residual estimate, however, is pretty shocking. Despite lower expected beef production and modest increases in pork and poultry production in 2012, USDA says Feed & Residual use will increase 600 million bu. from the current marketing year to hit 5.2 billion bushels. Most of that increase is very likely in the residual component of the Feed & Residual cateogry.
It also suggests USDA’s current 2011-12 Feed & Residual estimate is too low. Perhaps USDA is working with a negative residual for old-crop corn, which makes supplies look bigger than reality. (That would help explain current strength in corn basis around the country.)
And then there's USDA's soybean export projection of 1.5 billion bushels. That would get U.S. exports back to levels seen two years ago and would be well above this year's estimate of 1.275 billion bushels. We were anticipating a recovery, but not by that much. Exports of the 2012 soybean crop will be better than for the 2011 crop, but we'll be surprised if shipments reach USDA's projection of 1.5 billion bushels.
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