DES MOINES - Iowa and U.S. corn row crop yields are slipping, while demand for these grains remain strong, meaning ending supplies by Sept. 1, 2012, will be even tighter than 2011.
The expectations is now that commodity prices will continue to remain high through the 2012 marketing year.
A University of Illinois Farm Economics Facts and Opinions report, released in July, predicts net returns for 2012 at $269 per acre for corn and $136 per acre for soybeans, indicating a profitable year.
-Messenger photo by Karen Schwaller
The 2011 oat harvest in Iowa is virtually completed. Dustin Schwaller combines oats west of Milford on July 30.
"For corn we're looking at non-land cost at $513 per acre for high-productivity land," said agricultural economist and farm management specialist Gary Schnitkey. "That's up from last year when we saw $418 projected for 2011. The $513 cost, if it happens, is the second highest on record, with 2009 higher at $535.
"Soybeans are projected to be $301 per acre, which would be the highest ever."
Supply grows tighter
According to the U.S. Department of Agriculture's National Agricultural Statistics Bureau, Iowa is estimated to harvest an average 177 bushels of corn per acre, well over the national average predicted at 153 bpa.
Total U.S. production is anticipated at 12.94 billion bushels, which was dropped from 13.47 bb last month, a loss of 50 million bushels.
That puts 2012 ending stocks at 714 mb, a carryover of 5.4 percent of the upcoming harvest.
"If that occurs," said Darin Newsom, senior market analyst for DTN, during an Aug. 10 webinar, "it'll be the second tightest in history."
Despite the tightening supply - due to poor pollination from above-average heat across much of the Corn Belt - and evidence of some corn rationing occurring this summer, Newsom said he expects demand to remain relatively high over the next 30 months.
A similar scenario is expected in soybeans with an estimated national yield average of 41.4 bpa, down two bushels from last month. However, Newsom said he thinks the USDA dropped the estimate too far.
Larry Kershner, Farm News news editor, contributed to this report.