August Supply and Demand Report


[note: I have a prior obligation today. Here is a quick synopsis of the reports with more to come in later today or over the weekend]

This morning USDA’s World Agricultural Outlook Board released their August estimates of U.S. and global supply and demand (S&D) for major ag commodities. This month’s report is the first to incorporate objective field data for summer crops into the predictions. Also, USDA also released state level information in their Crop Production report, which sheds light on the locations that the drought is impacting most.

U.S. Crops

The S&D report revealed that yields for both corn and soybeans continue to be damaged. They cut the projected corn yield from 146 bushels per acre (bu/ac) reported last month to 123.4 bu/ac. This follows a drastic reduction from last month’s report (from 166 in June, see the discussion here). Collectively, the estimated national corn yield has been reduced 25.7% since June.

The projected national soybean yield was trimmed to 36.1 bu/ac from 40.5 last month.Similar to corn, this follows a reduction reported last month and collectively expected soybean yields have fallen 17.8% since June.

Yields were not the only reductions made for the U.S. corn and soybean crops. Projected acres harvested were cut as well. Corn acres harvested are currently estimated at 87.4 million and soybeans are at 74.6. These are lower by 1.5 million and 700,000 when compared to last month’s projections, respectively. If these turn out to be true this would put the percentage of acres abandoned at 9.3% for corn and 2.0% for soybeans.

Cotton experienced a yield reduction as well, albeit a very, very small reduction. Yields were lowered by 1 pound per acre (lb/ac), from 785 last month to 784. However, this was more than offset by an increase in the projected number of acres that will be harvested; an increase of 410,000 from last month’s estimate.

This, in my opinion, is the telling difference from last year’s drought compared to the drought the U.S. is experiencing this year. Last year the drought was less wide-spread and did it’s most extensive damage in the southwestern U.S. Texas, as the largest cotton producing state, was extremely dry and numerous cotton acres were left unharvested (35.8% nationally in 2011). This year, although the Southwest is still quite dry, it is not as severe as a year ago. On the other hand, the Midwest is taking the larger hit and it is shown in the projected level of abandonment for corn.

Mississippi Crops

The August Crop Production report is the first of the year to detail state specific information. Here’s a quick recap of those for Mississippi:

Acres Harvested Change from 2011 Yield Change from 2011 Production (1,000) Change from 2011
Corn 800,000 8.1% 147 14.8% 117,600 24.2%
Cotton 570,000 -5.8% 926 -2.7% 1,100 -8.3%
Peanuts 47,000 235.7% 3,900 -2.5% 183,300 227.3%
Rice 133,000 -15.8% 6,700 -2.2% 8,911 -17.7%
Sorghum 63,000 26.0% 79 6.8% 4,977 34.5%
Soybeans 2,100,000 16.7% 39 0.0% 81,900 16.7%

Corn, Sorghum and Soybean yield and production is in bushels; Cotton yield is pounds per acre and production is 480 pound bales; Rice yield is pounds per acre and production is hundredweight; Peanut yield and production is pounds.

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