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USDA: Ongoing drought causes significant crop yield declines

Date:
August 10, 2012
Source:
Ohio State University Extension
Summary:
Corn production will drop 13 percent to a six-year low, the U.S. Agriculture Department said Aug. 10, confirming what many farmers already knew -- they are having a very bad year.

Drought's impact on corn.
Credit: Image courtesy of OSU Extension

Corn production will drop 13 percent to a six-year low, the U.S. Agriculture Department said today (Aug. 10), confirming what many farmers already knew -- they are having a very bad year, Ohio State University Extension economist Matt Roberts said.

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In its monthly crops report, USDA today 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. Soybean production is forecast to be down as well, to 2.69 billion bushels, which is 12 percent lower than last year, as well as lower than the 3.05 billion bushels the USDA forecast last month.

The projections mean this year's corn production will be the lowest production since 2006, with soybeans at its lowest production rate since 2003, Roberts said. The USDA said it expects corn growers to average 123.4 bushels per acre, down 24 bushels from last year, while soybean growers are expected to average 36.1 bushels per acre, down 5.4 bushels from last year.

In Ohio, those numbers translate into a projected 126 bushels per acre yield, which is down 32 bushels per acre from last year for corn, he said. Soybeans are projected at 42 bushels per acre, down from last year's 47.5 bushels per acre yield.

The impact on growers is going to be tough, Roberts said.

"I don't think this is a surprise to anyone, especially growers," he said. "For most farmers, this is the year that they will lose much of the profits they've made over five good years.

"I don't expect to see a lot of bankruptcies, but certainly there will be a lot of belt-tightening among farmers this year. With crop insurance so widespread, it will help ensure that we don't see a lot of bankruptcies and help farmers weather this storm."

This as Ohioans have suffered through multiple days of record-setting temperatures of over 100 degrees this summer, with scant rainfall that has resulted in parched crop fields. In fact, with an average temperature of 77.6 degrees, July was the hottest month ever recorded nationwide, breaking a record set during the Dust Bowl of the 1930s, according to the National Climatic Data Center.

Most of Ohio except for some counties near the Kentucky, West Virginia and Pennsylvania borders is experiencing moderate drought, with some counties near the Indiana and Michigan borders experiencing severe and extreme drought as of Aug. 7, according to the most recent U.S. Drought Monitor. Nationwide, 80 percent of the U.S. is experiencing drought conditions, up from 40 percent in May, according to the monitor.

Currently, topsoil moisture in Ohio was rated 45 percent very short, 41 percent short and 14 percent adequate, with no surplus, according to the latest U.S. Department of Agriculture Weekly Crop Report.

The lack of rainfall has decimated many corn crops, which were damaged as a result of not enough rain during its crucial pollination period. So even though growers planted a record acreage of corn this year in anticipation of a strong year with record yields, the lack of enough rainfall has caused yield forecasts to continue to decline, Roberts said.

And while soybeans weren't as negatively impacted by the lack of rain earlier in the growing season, ongoing drought conditions are taking a toll on crops, which are seeing yield estimates decline as well, he said, noting that further yield declines are likely as the growing season continues.

The corn and soybean forecasts are largely in line with market expectations, Roberts said.

Corn prices through yesterday increased 63 percent since mid-June, reaching an all-time high today (Aug. 10) of $8.49 a bushel on the Chicago Board of Trade.

"Most analysts in February expected a corn yield of 163, meaning there has now been a 40 bushel per acre yield cut from the beginning of the year, with many analysts expecting yields to go below 120 per bushels when it is all said and done," he said. "That means there's just a lot less corn around than what we expected.

"That leaves 2.3 billion fewer bushels of corn to be consumed than in 2011, which means that consumption has to be rationed out. And even though ethanol will be down about 10 percent and exports will be down by 25 percent from two years ago, we will still end up with extremely tight inventories."

For livestock farmers, the situation is even worse, Roberts said.

"Livestock producers will feel more pain from higher feed prices and negative profit margins," he said. "We will see a lot more stress on the entire livestock end, from poultry all the way up to cows.

"Cow/calf producers are in a very difficult situation because of poor pasture conditions and high hay costs as a result of this historic drought. Overall, it's going to be a very bad year for the farm economy. While there will be pockets of growers that don't feel it as bad, livestock farmers will feel it just all around because of the overall feed costs."


Story Source:

The above story is based on materials provided by Ohio State University Extension. The original article was written by Tracy Turner. Note: Materials may be edited for content and length.


Cite This Page:

Ohio State University Extension. "USDA: Ongoing drought causes significant crop yield declines." ScienceDaily. ScienceDaily, 10 August 2012. <www.sciencedaily.com/releases/2012/08/120810140603.htm>.
Ohio State University Extension. (2012, August 10). USDA: Ongoing drought causes significant crop yield declines. ScienceDaily. Retrieved October 31, 2014 from www.sciencedaily.com/releases/2012/08/120810140603.htm
Ohio State University Extension. "USDA: Ongoing drought causes significant crop yield declines." ScienceDaily. www.sciencedaily.com/releases/2012/08/120810140603.htm (accessed October 31, 2014).

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