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U.S. Department of Agriculture Lowers Projection on Corn for Fourth Straight Month

U.S. Drought 2012 Impacts Hitting Hard on America’s Top Crop

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The U.S. Department of Agriculture (USDA) has lowered its projection for corn – the top cash crop in the country for the fourth consecutive month. The impacts of the drought that plagued most of the Midwestern U.S. in 2012 are far reaching, only now are the full affects becoming known. The harvest season has provided a clearer insight into the damage that was done to the corn crop and with less of the staple commodity to go around, both livestock farmers and consumers can expect higher prices for feed and some food products such as meat and dairy. While the USDA report is released on a monthly basis, the Oct. report holds the most significance because it comes out during harvest and provides the most reliable projections.

These projections have changed dramatically over the past several months, as earlier this year it was projected that the U.S. corn crop would reach a record high of 15 billion bushes due to the amount of acreage that was planted. However, since then the USDA has had to revise their forecasts due to the significant amount of crop damage that accumulated from the drought. As of Oct. 7, nearly 70% of the corn crop has been harvested and is projected to wrap up by the end of this month. To date, farmers have harvested close to 60% of the soybean crop.

The most recent projections have prompted a waiver for the biofuel mandate that was passed into law in 2005, stating that 13.2 billion gallons of corn-based biofuel be produced in 2012. This waiver is backed by U.S. livestock producers who have been grappling with the rise in high feed prices – which have been exacerbated by the drought. The U.S. Environmental Protection Agency will vote on this wavier come November.


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