In its monthly crops report, USDA last week cut its projected U.S. corn production to 10.8 billion bushels, down 17% from its forecast last month of nearly 13 billion bushels and 13% lower than last year. The projections mean this year's corn production will be the lowest since 2006, meaning there will be intense competition for the reduced crops, he says , Matt Roberts, Ohio State University Extension economist.
The USDA said it expects corn growers to average 123.4 bushels per acre, down 24 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, Roberts said.
For livestock producers, who are already suffering because of poor pasture conditions and high hay costs as a result of the historic drought, that means higher feed costs and the potential that more of them will be forced to sell their herds because they can't afford to feed them, Roberts says.
This is prompting increased calls to divert less corn this year to ethanol by easing the U.S. ethanol mandate, he said. Under the Renewable Fuels Standard, U.S. fuel companies are required to blend 13.2 billion gallons of ethanol into gasoline in 2013, or about 10% of total gasoline usage, which requires converting some 40 percent of the U.S. corn crop into the biofuel, he says.