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Projections going into Harvest

Lee L. Schulz and Chad Hart

The changing of seasons from summer to autumn usually shifts the focus of agricultural market traders. For crops, the focus shifts from supplies to usage. For livestock, the focus shifts from the current year to the upcoming year. USDA’s monthly projections of the global agricultural supply and demand situation help frame those shifts and outline the anticipated movements within the markets. The September report provided a mix of signals across the crop and livestock markets. In general, the expansion of meat production is slowing down. While meat demand remains strong, animal numbers, especially in beef, have pulled back due to a variety of reasons. Livestock prices are projected to fall in 2022, given the slightly higher production, with the exception of beef (see table 1). Crop production is also projected higher this fall, despite the drought. Crop usage, which was strong throughout most of the 2020 marketing year, fell off during the summer. The crop usage outlook for the 2021 crops was increased slightly, but still is below the previous year’s levels.

Table 1. USDA’s Livestock Projections
2021 2022 Change from 2021 to 2022
Forecast Change from August Forecast Change from August
Production (Billion Pounds)
Meat Prices ($ per Cwt.)
Meat Prices (Cents per Pound)
Source: USDA-WAOB.

For the livestock sector, the 2021 calendar year has been an interesting one. Production across species is at record or near-record levels. The supply chain issues of 2020 have mostly been worked through, but sporadic problems still do occur. Meat demand, both domestic and international, has been robust and pushed prices higher. But livestock producers are also facing higher feed costs, limiting profitability. USDA lowered its annual forecasts for 2021 production in beef, pork, and turkey. The beef reduction is a combination of fewer animals harvested (more cows, but less steers and heifers) and a reduction in carcass weights. The pork industry is also seeing lower-than-expected slaughter numbers in 2021. The drop in production and robust consumption allowed USDA to raise its livestock price projections for 2021 for cattle, hogs, broilers, and turkeys.

However, the outlook for 2022 is a bit more challenging. Compared to 2021, USDA expects lower beef production and increased pork, broiler, and turkey production. International meat trade is projected to decline in 2022 as well, with beef, pork, and broiler shipments falling, while turkey exports increase slightly. For pork and broilers, the combination of larger production and declining exports pulls expected prices lower for the coming year. For turkey, the increase in exports is not enough to offset the larger supplies, so prices are projected lower as well. For beef, the supply reduction is enough to cover the export decline, and beef prices are projected to continue to rise.

For corn, the September USDA report provides several adjustments to both supply and demand (see table 2). In the week leading up to the reports, NASS announced it would incorporate information from the FSA acreage data to update their crop acreage figures. Normally, these adjustments are made in October. The national planted area was increased 612,000 acres to a total of 93.3 million. This moved the estimate for national harvested (for grain) area to just over 85 million acres. The September yield estimates are a combination of the data from USDA’s objective yield survey and the simultaneous farmer yield survey. The national average corn-yield estimate rose 1.7 bushels to 176.3 bushels per acre. The pattern of yields across the country remained consistent with earlier estimates, with record yields projected in the eastern Corn Belt and lower yields in the west. The September update reveals slightly better corn crops across most of the nation. Putting together the acreage and yield updates, USDA found evidence to support a record 15 billion bushel corn production projection.

Table 2. Corn Supply and Use
2020 2021 Change from 2020 to 2021
Estimate Change from August Forecast Change from August
Area Planted(mil. acres)
Production(mil. bu.)14,182014,996246814
Beg. Stocks(mil. bu.)1,91901,18770-733
Imports(mil. bu.)2502500
Total Supply(mil. bu.)16,127016,20831681
Feed & Residual(mil. bu.)5,72505,70075-25
Ethanol(mil. bu.)5,035-405,2000165
Food, Seed, & Other(mil. bu.)1,43501,4250-10
Exports(mil. bu.)2,745-302,47575-270
Total Use(mil. bu.)14,940-7014,800150-140
Ending Stocks(mil. bu.)1,187701,408166221
Season-Average Price($/bu.)4.450.055.45-0.301.00
Source: USDA-WAOB.

The usage side of the corn ledger was also updated. The main storyline was a slight pullback in old crop usage and a slightly bigger boost to new crop usage. The recent slowdown in ethanol production translated into a 40 million bushel decline in corn grind out of the 2020 crop. Export sales out of the 2020 crop were reduced by 30 million bushels. With the 70 million bushels added back to stocks, the 2020/21 corn ending stocks are projected at 1.187 billion bushels. But the increase in stocks did not impact the 2020/21 season-average price estimate, which increased $.05 to $4.45 per bushel, revealing that USDA is factoring in more sales from earlier in the marketing year. For the new (2021) crop, both feed/residual usage and exports were increased by 75 million bushels each. However, given the increase in stocks and the higher production projection, 2021/22 ending stocks are now set at 1.408 billion bushels, up 166 million from last month. The 2021/22 season-average price estimate fell $.30 to $5.45 per bushel.

Nationally, USDA reduced total planted area for soybeans by 320,000 acres, to 87.235 million acres (see table 3). The national average soybean-yield estimate came in at 50.6 bushels per acre, up 0.6 bushels. The general pattern remains—record crops in the east and drought-stressed crops in the west. Overall, national soybean production is projected at 4.374 billion bushels, which would be the third-largest, trailing only the 2017 and 2018 crops. Soybean usage adjustments reduced domestic consumption, but increased international sales. For the 2020 crop, domestic crush was reduced by 15 million bushels, mainly being driven by soybean meal shifts. That change boosted the 2020/21 ending stocks to 175 million bushels. The 2020/21 season-average price estimate held steady at $10.90 per bushel. For the 2021 crop, that reduction in domestic crush is extended, taking away another 25 million bushels as we look forward. However, the positive change in export sales, increased by 35 million bushels, offset that loss. The 2021/22 ending stocks are projected at 185 million bushels, up 30 million from last month, and the 2021/22 season-average price estimate fell $.80 to $12.90 per bushel.

Table 3. Soybean Supply and Use
2020 2021 Change from 2020 to 2021
Estimate Change from August Forecast Change from August
Area Planted(mil. acres)
Production(mil. bu.)4,13504,37435238
Beg. Stocks(mil. bu.)525017515-350
Imports(mil. bu.)20025-105
Total Supply(mil. bu.)4,68004,57440-106
Crush(mil. bu.)2,140-152,180-2540
Seed & Residual(mil. bu.)1050119014
Exports(mil. bu.)2,26002,09035-170
Total Use(mil. bu.)4,505-154,38910-116
Ending Stocks(mil. bu.)175151853010
Season-Average Price($/bu.)10.900.0012.90-0.802.00
Source: USDA-WAOB.

These projections show the markets will have plenty of product to work with as the calendar flips to 2022, no matter whether you are looking at the crop or livestock part of agriculture. Record to near-record supplies usually indicate lower prices ahead, which is projected to be the case for pork, broilers, and turkey. Beef, corn, and soy are relying on enough usage to buck that trend. The export markets will likely drive the pricing picture moving forward—several products set export quantity records within the past year, including beef, corn, and soy. The USDA projections show a drop in those export quantities; however, they maintain sizable enough international shipments to keep the outlook for annual average prices higher.

Suggested citation:

Schulz, L. and C. Hart. 2021. "Projections going into Harvest." Agricultural Policy Review, Fall 2021. Center for Agricultural and Rural Development, Iowa State University. Available at