Iowa maintained its lead as the nation's top corn-producing state, but farmers saw the price of corn plunge down the 40 cent per bushel limit. That's what happened last week on Thursday, January 12, 2012 when USDA released its annual Crop Production Summary for 2011. USDA's final estimate on the 2011 harvest, with increases in Iowa and U.S. corn production and a larger than expected figure for corn stocks, dropped corn prices to $6.11 per bushel Thursday on the Chicago Board of Trade.
Iowa's final yield of 172 bushels of corn per acre for a statewide average leads the nation for 2011, and is up 1 bushel per acre from the December estimate and ahead of the 2010 final yield of 165 bushels per acre. Iowa's total 2011 corn production is estimated at 2.356 billion bushels, up from 2.153 billion bushels produced in 2010--but short of the record 2.420 billion set in 2009.
In 2011, Iowa farmers harvested corn on 13.7 million acres, up about 650,000 acres from 2010. Iowa was the only state in the Corn Belt in 2011 to increase its yield over the previous year. Iowa's total corn production, which USDA estimates to be 2.356 billion bushels, easily outpaced second-place Illinois, which harvested 1.94 billion bushels. Iowa produced 19% of the total U.S. corn crop in 2011—the U.S. crop totaled 12.358 billion bushels.
Increase in corn production and supply caught market by surprise
Final U.S. corn production was estimated at 12.358 billion bushels for 2011, up 48 million bushels from the previous USDA forecast. Traders were expecting a drop of nearly 45 million bushels. USDA on January 12 estimated corn stocks for the 2011-12 marketing year will end the year at 846 million bushels, a projection well above the trade's expectations. The grain trade was looking for a decline of 100 million bushels in the projected carryout forecast for August 31, 2012.
USDA also on January 12 forecast decreases in corn and soybean exports for the 2011-2012 marketing year which will end August 31, 2012. That was also surprise, says Bryce Knorr, market analyst for Farm Futures magazine. Everyone assumed the USDA report would be friendly and it was not. USDA is forecasting the decrease in corn and soybean exports despite the fact that reports are coming from South America that farmers in that area of the world are experiencing a major drought during their current summer growing season.
Iowa's 172 bushel corn yield for 2011 is up from 165 bushels in 2010
The final production figures show Illinois was runner-up to Iowa among corn producing states in 2011, as Illinois had an average yield of 157 bushels per acre. Iowa farmers harvested 172 bushels per acre, up from 165 bushels in 2010.The Illinois total harvest for 2011 was 1.947 billion bushels and Iowa was 2.356 billion bushels—Iowa handily beat Illinois for the top spot.
Those Iowa and Illinois figures are way ahead of the national average yield. USDA estimated the national corn yield at 147.2 bushels per acre for 2011, up slightly from the 146.7 bushel per acre estimate USDA made in December but 5.6 bushels per acre below the 2010 national average.
Iowa is also the U.S. soybean production leader, edging out Illinois in 2011
In addition to leading the nation in corn production, Iowa was also the leading soybean producing state in 2011.
Iowa's soybean yield dipped slightly in 2011 to 50.5 bushels per acre, from 51 bushels per acre in 2010. The national soybean harvest for 2011 is estimated at 41.5 bushels per acre, an average of 2 bushels per acre below 2010.
Total soybean production in Iowa for 2011 was 466.1 million bushels, down from 496.2 million the previous year. About 9.23 million acres were harvested for soybeans in Iowa in 2011, down about a half-million acres from the previous year as farmers switched more acres to corn to capture prices that had doubled from mid-2010 to planting time last year.
While Iowa led the nation in 2011 with 466.1 million bushels of soybeans produced, Illinois came in second with 416.4 million bushels. Illinois had a yield of 47 bushels per acre for its state average yield, compared to Iowa's 50.5 bushel per acre. Iowa harvested 9.2 million acres of soybeans in 2011; Illinois harvested 8.7 million acres of soybeans.
Ethanol production will consume about 40% of 2011 U.S. corn crop
USDA says ethanol production will use about 40% of the nation's 2011 corn production, an estimate that is unchanged from earlier reports. U.S. corn and soybean markets had rallied since before Christmas based on news of hot, dry weather in Argentina and Brazil. While damage to corn pollination may already be taking place in Argentina, soybean blooming and pod development will occur over the next month or so.
"All eyes will now be on South America to see whether their drought continues and how that impacts their yield, which in turn will impact the world supply," notes Dean Coleman, president of the Iowa Soybean Association. Argentina is the second-largest corn exporter, after the U.S., and Brazil and the U.S. annually compete for the world's soybean exporting lead. U.S. corn exports have fallen below year-earlier levels since September 1, 2011 as Russia and Ukraine have returned to the world marketplace to sell their bumper 2011 grain crops. Russia and Ukraine were kept out of world markets in 2010 because they suffered extensive drought damage to their crops that year.
USDA revises 2011 U.S. corn crop upward—here's NCGA's view
In its annual report on crop production released Thursday morning January 12, 2012, USDA slightly increased its previous estimates of 2011 U.S. corn production and average yield, now reporting a crop of 12.4 billion bushels harvested on 84 million acres, for a yield of 147.2 bushels per acre. "This demonstrates the resilience of corn and corn growers despite significant weather challenges throughout the growing season," says Garry Niemeyer, an Illinois farmer who is president of the National Corn Growers Association.
"Despite lost acres due to flooding and other disasters and a 2011 yield that's 5.6 bushels below the 2010 average, the nation's corn crop for 2011 is only one percentage point below the 2010 amount produced," notes Niemeyer. "A lot of people, including the grain market, expected a much different final report, and that explains the price drop on corn futures, but we see this as a positive sign. It gives us even further reason to expect that we will continue to meet all needs for corn into the foreseeable future."
In the World Agricultural Supply and Demand Estimates report, also released Thursday January 12, the USDA reported that corn use for the 2011-12 marketing year is being raised. That's due to exports projected at 50 million bushels higher, reflecting the strong pace of sales to date and reduced prospects for the 2012 corn crop in Argentina. Ending stocks of corn for the United States at the close of the marketing year on August 31, 2012 are projected to be 2 million bushels lower at 846 million bushels.
Click here for USDA's Crop Production Annual Summary for 2011 and for previous years. Click here for the latest update on USDA's World Agricultural Supply and Demand Estimates Report.