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USDA Bumps Corn Crop Prediction by a Billion

USDA predicted a record corn crop of 13.5 billion bushels for the 2011/2012 crop year. This is an increase of 1.1 billion bushels from last year as a result of an estimated increase of 4 million acres in intended plantings.

USDA predicted a record corn crop of 13.5 billion bushels for the 2011/2012 crop year. This is an increase of 1.1 billion bushels from last year as a result of an estimated increase of 4 million acres in intended plantings. USDA’s monthly World Agricultural Supply and Demand Estimates report also predicted the 2011/2012 season-average farm price for corn would be a record $5.50 to $6.50/bu. compared to last year of $5.10 to $5.40/bu. Ending stocks for the 2010/11 crop year are estimated at 730 million bushels and 900 million bushels for the 2011/12 crop year. The report estimates the 2011/12 soybean production at 3.285 billion bushels, down 44 million bushels from last year, due to fewer harvested acres. Soybean prices are estimated for 2011/12 at $12 to $14/bu. compared to last year of $11.40/bu.

Release Conservation Reserve Acres – Seventy-two national and state agricultural groups representing agribusiness and the meat, livestock and poultry industries sent a letter to members of the House and Senate Agriculture Committees asking that farmers be allowed to remove land “that can be cropped in an environmentally sensitive way" from the Conservation Reserve Program (CRP), without penalty. Citing tight supplies of grain and oilseeds, the organizations stated, "Increasingly, this challenge of adequacy of grains and oilseeds is not simply a U.S. supply issue. It is a global concern where many nations are trying to provide an affordable food supply to people that are finding it difficult to meet basic nutritional needs.” Those signing the letter included American Bakers Association, American Feed Industry Association, Dairy Farmers of America, National Chicken Council, National Grain and Feed Association, National Meat Association, National Pork Producers Council, National Turkey Federation, Pet Food Institute, and Tyson Foods. Currently there are approximately 31 million acres in CRP.

Pending FTAs and the Impact on Agriculture - The House Agriculture Committee held a hearing on the importance of the pending free trade agreements (FTAs) to agriculture with Korea, Colombia and Panama. Secretary of Agriculture Tom Vilsack said the three FTAs would increase U.S. agricultural exports by $2.3 billion and support more than 19,000 jobs. According to USDA and U.S. Trade Representative, the Korea agreement will increase U.S. agricultural exports by over $1.9 billion annually. Two-thirds of the items traded with Korea will be duty-free upon implementation. Products would include corn, soybeans for crush, cotton, cherries, orange juice, grape juice and whey. Under the agreement, the current 40% tariff on beef would decline to zero over 15 years; there would be duty free entry for more than 90% of U.S. pork products by 2016; and tariffs on poultry leg quarters dropping from 20% to zero over 10 years. Under the Colombia FTA, U.S. agricultural exports on the first day of implementation will receive duty-free treatment on products accounting for almost 70% of current trade. Agriculture exports are estimated to increase by 44%, or an additional $370 million per year. Under the Panama agreement, U.S. agricultural exports are estimated to increase to over $450 million per year. Congress is expected to vote on the FTAs this summer.

Record Agricultural Exports for First Half of FY’11 - USDA announced that U.S. farm exports reached an all-time high of $75 billion during the first half of fiscal year 2011, which is 27% higher than the same period last year. China is the largest export market ($15.1 billion) for U.S. agricultural products for the first six months, accounting for nearly 20% of all U.S. agricultural exports. Canada is the second-largest market. USDA estimates that agricultural exports will reach $135.5 billion this fiscal year.

Merge Energy Department with EPA - Senator Richard Burr (R-NC) has introduced legislation that would combine the Department of Energy (DOE) and the Environmental Protection Agency (EPA) into a new agency called the Department of Energy and Environment. Senator Burr says the new agency would result in more than $3 billion in savings for 2012. He said, "The amount of money wasted annually on duplicative programs within the federal government is staggering. This common sense approach will reduce duplicative and wasteful functions across these two agencies and streamline our approach to a comprehensive, coordinated energy and environmental policy."

P. Scott Shearer
Vice President
Bockorny Group
Washington, D.C.