Fall 2002, Vol. 8 No. 4
Iowa's Agricultural Situation
Corn, Soybean Prices and Yields Up Slightly; Hog Inventory Edges Downward
The U.S. Department of Agriculture (USDA) October 21 Iowa Crops and Weather report estimated harvest to be 41 percent complete, compared to 59 percent normally harvested by this time. Dry weather in mid-October allowed quicker harvesting. The early October ratings confirm that Iowa crops are in good shape, with 70 percent rated good to excellent and only 10 percent rated poor to very poor. As of October 1, Iowa's corn crop was forecast to yield a record 159 bushels per acre. The projected yield is 13 bushels above last year's level and 15 bushels above the five-year average. Production is forecast at 1.89 billion bushels for the state, up 14 percent from last year's total. As of mid-September, the price of corn in Iowa averaged $2.48 per bushel, up $0.63 from the price a year ago.
Nationwide, the USDA October 11 Crop Production report raised the corn production forecast to 8.97 billion bushels, which is 6 percent below last year's production. Based on October 1 conditions, yields are expected to average 127.2 bushels per acre, down 11 bushels from last year's level. The forecasted yield and production are the lowest in seven years. Wet weather in spring that delayed planting in the eastern Corn Belt, as well as persistent hot, dry weather that stunted growth and limited yield potential, has led to yields below 2001 levels in many areas of the country. The harvested corn area is projected at 70.5 million acres, up 3 percent from 2001 area. According to the USDA September Grain Stocks report, the total old-crop corn stock was recorded at 1.60 billion bushels, down 16 percent from last year's total. The ratio of off-farm to on-farm storage was 1.7 compared to 1.53 last year. The summer-time corn usage of 2.00 billion bushels fell short of the 2.02 billion bushels consumed last summer. USDA estimates the worldwide feed grain production at 300 million bushels less than last year's production, which is favorable for U.S. export demand. Projected corn prices for the 2002-03 marketing year are $2.35–$2.75/bu.
The soybean harvest, slowed by damp weather in the beginning, was in full swing by mid-October, bringing the statewide completion rate to 88 percent, just 2 percent below normal.
Statewide, the soybean crop condition remained steady at 66 percent good to excellent, which is better than conditions a year ago. The October yield forecast of 46 bushels per acre is up 2 bushels from the 2001 level and slightly above the five-year average. The state soybean production is projected at 489.9 million bushels, up 2 percent from last year's crop. Iowa farmers were getting $5.42 per bushel of soybeans in August-September, $0.77 higher than the price last year.
The USDA October 11 Crop Production report forecasted soybean production at 2.65 billion bushels, 8 percent below the level in 2001. Based on October 1 conditions, yields are expected to average 37 bushels per acre, down 7 percent from last year's yields. If realized, this would be the lowest production since 1999. Expected harvested acreage is forecast at 71.8 million acres, 2 percent below that of last year. According to the September Grain Stocks report, the total old-crop soybean stock was recorded at 208 million bushels, down 16 percent from last year's stock. The ratio of off-farm to on-farm storage was 2.3 compared to 1.96 last year. On the demand side, the USDA October 11 World Agricultural Supply and Demand Estimates report puts U.S. soybean exports at 850 million bushels, 20 percent less than exports a year ago. In spite of a large drop in U.S. soybean exports to the European Union and Korea, so far U.S. exports exceed last year's levels. Soybean shipments to China are expected to remain strong until the end of the year, when pending genetically modified organism (GMO) labeling regulations by the Chinese government may go into effect. Summer consumption of soybeans totaled 477 million bushels, up 4 percent from that of a year ago.
Iowa Hogs and Pigs
After August's one-third cut in hog prices, the USDA September 27 Hogs and Pigs report brought a bit of good news for pork producers, indicating smaller supplies in the coming months. The report estimated the inventory of hogs on U.S. farms at 60.2 million hogs and the inventory of market hogs at 54.2 million; both numbers are 1 percent above last year's levels. There were 6.05 million breeding hogs, 2 percent fewer than last year. The initial market reaction was positive, as these inventories were below trade expectations. Even though the reduction in the breeding herd points to the beginning of a liquidation phase, a reduction in hog slaughter is expected in the spring quarter of 2003. In September, Iowa farms had 15.4 million hogs and pigs. This is 2 percent higher than levels a year ago, but nearly 1 percent lower than the June 1 inventory. The Iowa June-August pig crop this year was counted at 3.65 million head, on a par with last year. A total of 420,000 sows farrowed, with an average litter size of 8.7 pigs per litter. As of September 1, Iowa producers planned to farrow 440,000 head of sows and gilts in the September-November quarter, down 2 percent from last year's number. The estimated farrowing intentions for the December-February 2003 period of 440,000 head of sows are 5 percent above the number of sows farrowed during the same period in 2001. Analysts expect that pork producers will continue to market hogs at a loss for most of the coming winter and spring. Break-even prices for producers are projected to appear by summer of 2003. ♦