What is in this article?:
- How large does the 2013 corn crop need to be?
- Blend wall to expand
• Assessing consumption potential for the upcoming marketing year is not straightforward, because consumption depends on the strength of demand in each of the major consumption categories as well as the price of corn.
• The price of corn, in turn, will be influenced by the size of the U.S. crop.
Based on corn planting intentions of nearly 97.3 million acres (implied harvested acres for grain near 90.2 million) and a trend yield of 161.5 bushels, the 2013 season started with expectations of a record crop near 14.6 billion bushels in the United States.
A crop of that size would be 1.5 billion bushels larger than the previous record crop of 2009 and the record large consumption during the 2009-10 and 2010-11 marketing years, according to University of Illinois agricultural economist Darrel Good.
“Production prospects are now being called into question due to the late start of the planting season in most of the major corn production states,” Good said.
“Increasingly, the late start to the season and prospects for further delays in many areas due to upcoming weather suggest that a larger-than-average percentage of the 2013 crop will be planted ‘late.’
“All other factors being equal, late planting poses some yield threat relative to trend value. In addition, continued delays to planting, particularly in northern areas, might reduce the acreage planted to corn relative to intentions reported last month.
“The magnitude of potential yield and acreage reduction, if any, is very difficult to assess at this time because the planting season extends for another month.
“Instead, it is useful to calculate the size of crop needed to meet likely consumption during the 2013-14 marketing year. That calculation can be used to gauge any reductions in production potential as the planting and growing season progresses,” Good said.
According to Good, assessing consumption potential for the upcoming marketing year is not straightforward, because consumption depends on the strength of demand in each of the major consumption categories as well as the price of corn.
“The price of corn, in turn, will be influenced by the size of the U.S. crop,” Good said.
“Domestic non-feed use of corn is the least complicated category of consumption to forecast because demand is relatively stable and consumption is least sensitive to the price of corn.
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“Use in that category is dominated by corn consumed for ethanol production. Domestic ethanol consumption increased rapidly from 2006 through 2010 as a result of the Renewable Fuels Standards. Consumption, however, stagnated near 13 billion gallons in 2011 and 2012 as the E10 blend wall was reached.