USDA raised its estimate for this year’s corn and soybean yields, which also pushed forecasts for total production and ending stocks higher, according to today’s World Agricultural Supply and Demand Estimates. USDA lifted its forecast for corn production by 35 million bushels from last month’s estimate to 13.93 billion bushels, due to a 0.4-bu. increase in the average yield to 172.3 bu. per acre. Soybean production, now expected to hit 4.35 billion bushels, was up 33 million bushels from last month, also on a 0.4-bu. per acre higher projected yield. Meanwhile, the department left exports for corn and soybeans unchanged.
Lack of soil moisture has become a critical issue for the winter wheat crop and the leftover wheat stubble for cattle grazing in the plains. If rains don’t materialize, feedlots could increase demand for grain. Lack of rain has also lowered the water level in the Mississippi River, forcing barges to carry lighter loads of commodities, including fertilizers, or risk running aground. The Army Corp of Engineers at times has had to dredge a deeper, wider channel, backing up hundreds of barges and sending freight rates skyward. Without above-average rain and snow this winter, farmers next spring could be faced with the choice of cutting fertilizer use or planting fewer acres to corn.
Low water in the Mississippi is not the only logistical issue facing agriculture. Truck drivers continue to be in short supply and a rail strike is possible if even just one of 12 unions fail to ratify a tentative agreement they’ve hammered out with the railroads. Because railroads are considered critical infrastructure, Congress would likely halt a full-fledged strike, but a slowdown—and price spike—would occur nonetheless as workers get ready to strike.
While the commodities that make it to the nation’s ports would go to the highest bidders, not all buyers will be willing to secure product at any price. Thus, given today’s strong U.S. dollar and the ongoing transportation issues, exports of corn and soybeans could slow, if only temporarily, leaving more product at home for dairy producers.
November 9, 2022
dailydairy.com
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