As the US corn harvest progresses, average annual prices received by farmers for their efforts are expected to climb a bit from last year.
The average national price expected for the 2017 crop was $3.30 a bushel, compared with $3.15 for the 2016 crop, according to USDA National Agricultural Statistics Service figures compiled by the Livestock Marketing Information Center.
The price bump can be attributed to expectations of lower yield and production along with forecasts for higher US feed and residual use. US corn exports for this crop were expected to be down from last year.
This LMIC graph of national average prices received by farmers going back to 1992 shows the expected bump and how it relates to previous years.
This crop year’s expected price of $3.30 a bushel is up from last year’s $3.15 by $0.15, or 4.76%. However, it is below the peak value of $6.89 by $3.59, or 52.1%.
The lowest national average price going back to 1992 was $1.82 a bushel in 1999, $1.48, or 81.3%, below this year’s forecast.
PRODUCTION SEEN LOWER
Part of the expected price support can be chalked up to lower expected production. The USDA’s NASS projects production at 13.901 billion bushels, down 1.325 billion, or 8.70%, from the record 15.226 billion a year earlier.
That’s still a great crop, though. It comes in third behind last year and the 2014 harvest of 14.216 billion bushels.
That production estimate leaned heavily on a lower expected national yield. The current yield estimate is 168.5 bushels an acre, down 6.8, or 3.88%, from a record 175.3 bushels last year.
This year’s yield also would rank second among all past yields, the next closest being the 2015 yield of 168.4 bushels.
FEED, RESIDUAL USE SEEN UP
Also among the reasons for national corn prices to be seen higher is a projected increase in feed and residual use.
Domestic livestock and poultry producers were expected to dispense 5.650 billion bushels of corn through their feed systems, up 110 million, or 1.99%, from last year’s 5.540 billion. This would be far from a record, however, as this LMIC graph shows.
The record feed and residual use came in 2004 at 6.158 billion bushels, which was followed closely by 2005 with 6.155 billion.
The lowest feed and residual use going back through 1992 was the 2012 crop at 4.315 billion bushels.
EXPORTS PROJECTED LOWER
Another major demand point for US corn is exports, which were projected to be lower at 1.975 billion bushels. This is down from last year’s 2.220 billion but is up from the 2015 crop of 1.898 billion.
The latest projections fit nicely with many previous years but are well above the stand-out low point of 730 million for the 2012 crop.
CATTLE, BEEF RECAP
No fed cattle sales were reported from the Livestock Exchange video auction Wednesday. Last week, light sales were reported at $109 per cwt on a live basis.
Cash cattle traded last week at $110 to $112 per cwt on a live basis, moving from $110 on Wednesday to $112 on Friday. On a dressed basis, cattle traded at $174 to $175.
The USDA’s choice cutout Thursday was up $2.16 per cwt at $202.37, while select was off $0.48 at $191.91. The choice/select spread widened to $10.46 from $7.82 with 110 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Wednesday was $154.40 per cwt, down $0.18. This compares with Thursday’s Oct settlement of $155.42, up $0.57 and with the Nov settlement of $157.17, up $1.00.