ST. LOUIS — The government slashed its expectations for U.S. corn and soybean production for the second consecutive month Friday, predicting what could be the lowest average corn yield in more than 15 years as the worst drought in decades continued punishing key farm states.
Nonetheless, Agriculture Secretary Tom Vilsack, in a statement supplied exclusively to The Associated Press, insisted that U.S. farmers and ranchers remain resilient and that the country would continue to meet demand as the global leader in farm exports and food aid.
The U.S. Agriculture Department cut its projected U.S. corn production to 10.8 billion bushels, down 17 percent from its forecast last month of nearly 13 billion bushels and 13 percent lower than last year. That also would be the lowest production since 2006.
The USDA, in its monthly World Agricultural Supply and Demand Estimates report, now expects corn growers to average 123.4 bushels per acre, down 24 bushels from last year in what would be the lowest average yield in 17 years.
Soybean production is now forecast at 2.69 billion bushels, a 12 percent decline from last year and well off the 3.05 billion bushels the USDA had expected last month. Expected yields on average of 36.1 bushels per acre would be the lowest since 2003.
Friday’s revised outlook comes months after corn farmers forecast a record year when they planted, sowing 96.4 million acres — the most since 1937. But the USDA now forecasts the area to be harvested at 87.4 million acres.
On Thursday, the U.N. food agency drew a direct correlation between price hikes in basic food commodities and the months of parched conditions in farm states. The Rome-based Food and Agriculture Organization said in its monthly price report that its overall food price index climbed 6 percentage points in July, although it was well below the peak reached in February 2011. The FAO’s index, considered a global benchmark used to track market volatility and price trends, measures the monthly price changes for a basket of food items including cereals, oils and fats, meat, dairy products and sugar.
Severe drought punishing the U.S.’s midsection has sent corn prices soaring, and expectations of worsened crop prospects in Russia because of dry weather sent world wheat prices up 19 percent, according to the FAO, which keeps close tabs on volatile global prices. Spikes in the prices of staple foods have led to riots in some countries in recent years.
But on Friday, Vilsack tried to tamp down such concerns.
“Americans shouldn’t see immediate increases in food prices due to the drought,” said Vilsack, as he visited drought-stricken Nebraska and with plans to be in Iowa next week. “What is important going forward is that we continue to do all we can to help the farmers, ranchers, small businesses and communities being impacted by this drought.”
Rick Whitacre, a professor of agricultural economics at Illinois State University, said consumers may see modest increases in prices in grocery stores due to tightened corn supplies because the grain is so ubiquitous, found in everything from cosmetics to cereal, soda, cake mixes and candy bars. But he believes the bigger fallout will come in 4 to 6 percent price increases for beef and pork, with many ranchers having sold off their livestock as feed costs rise and the drought burned up their pasturelands.
Nonetheless, Agriculture Secretary Tom Vilsack, in a statement supplied exclusively to The Associated Press, insisted that U.S. farmers and ranchers remain resilient and that the country would continue to meet demand as the global leader in farm exports and food aid.
The U.S. Agriculture Department cut its projected U.S. corn production to 10.8 billion bushels, down 17 percent from its forecast last month of nearly 13 billion bushels and 13 percent lower than last year. That also would be the lowest production since 2006.
The USDA, in its monthly World Agricultural Supply and Demand Estimates report, now expects corn growers to average 123.4 bushels per acre, down 24 bushels from last year in what would be the lowest average yield in 17 years.
Soybean production is now forecast at 2.69 billion bushels, a 12 percent decline from last year and well off the 3.05 billion bushels the USDA had expected last month. Expected yields on average of 36.1 bushels per acre would be the lowest since 2003.
Friday’s revised outlook comes months after corn farmers forecast a record year when they planted, sowing 96.4 million acres — the most since 1937. But the USDA now forecasts the area to be harvested at 87.4 million acres.
On Thursday, the U.N. food agency drew a direct correlation between price hikes in basic food commodities and the months of parched conditions in farm states. The Rome-based Food and Agriculture Organization said in its monthly price report that its overall food price index climbed 6 percentage points in July, although it was well below the peak reached in February 2011. The FAO’s index, considered a global benchmark used to track market volatility and price trends, measures the monthly price changes for a basket of food items including cereals, oils and fats, meat, dairy products and sugar.
Severe drought punishing the U.S.’s midsection has sent corn prices soaring, and expectations of worsened crop prospects in Russia because of dry weather sent world wheat prices up 19 percent, according to the FAO, which keeps close tabs on volatile global prices. Spikes in the prices of staple foods have led to riots in some countries in recent years.
But on Friday, Vilsack tried to tamp down such concerns.
“Americans shouldn’t see immediate increases in food prices due to the drought,” said Vilsack, as he visited drought-stricken Nebraska and with plans to be in Iowa next week. “What is important going forward is that we continue to do all we can to help the farmers, ranchers, small businesses and communities being impacted by this drought.”
Rick Whitacre, a professor of agricultural economics at Illinois State University, said consumers may see modest increases in prices in grocery stores due to tightened corn supplies because the grain is so ubiquitous, found in everything from cosmetics to cereal, soda, cake mixes and candy bars. But he believes the bigger fallout will come in 4 to 6 percent price increases for beef and pork, with many ranchers having sold off their livestock as feed costs rise and the drought burned up their pasturelands.