Table of Contents:
- USDA Lowers 2012 Yield Estimates, Announces Disaster Assistance
- <strong>USDA Announces Disaster Assistance</strong>
USDA surprised the grain markets by lowering the projected 2012 national average corn and soybean yields by more than expected in estimates released on July 11. USDA is now estimating the 2012 U.S. national average corn yield at 146 bu./acre, based on U.S. crop conditions on July 1. This is down 12% from the June 1 national corn yield estimate of 166 bu.
USDA has dropped 2012 national soybean yield estimate to 40.5 bu./acre on July 1, which is down 8% from a national yield estimate of 43.9 bu. on June 1. Final national average yields in 2011 were 147.2 bu. for corn and 41.5 bu. for soybeans. Since July 1, crop conditions have worsened in many of the major corn and soybean-producing areas of the U.S., leading to the likelihood of even further reductions in USDA projected national average corn and soybean yield estimates in future months.
Based on the June 1 national corn yield estimates, USDA was estimating the 2012 U.S. corn crop at 14.79 billion bushels, and projecting corn carryover levels to increase to 1.88 billion bushels by the end of the 2012-2013 marketing year. As of July 1, estimates for the total U.S. corn production are now below 13 billion bushels, which will likely lower projected carry-over levels back below 1 billion bushels, similar to 2011-2012 carry-over levels. Soybean carry-over levels at the end of 2012-2013 were already projected to be very tight at 145 million bushels, and will likely be even tighter after the reduction in the 2012 estimated national soybean yield.
Recently, there have been many comparisons regarding the drought of 2012 to the earlier U.S. droughts of 1988 and 1983. The drought in 2012 is rapidly moving toward the crop loss levels in those previous years. In 1983, there was a 20% reduction in the national corn yield, which would equate to a national corn yield of about 133 bu./acre in 2012. By comparison in 1988, considered the worst drought year in modern times, there was a national corn yield reduction of 30%, which would correlate to a 2012 national corn yield of about 116 bu./acre. Some experts feel that we are already approaching the 20% loss level nationally, and could reach the 30% loss level or greater, if we do not see improvement in weather conditions very soon.