Record U.S. corn crop hinges on southern, eastern growers amid western drought

Source: By Mark Weinraub, Reuters • Posted: Sunday, July 18, 2021

CHICAGO, July 15 (Reuters) – Timely planting, good spring rains and mild summer temperatures have raised expectations for a bumper harvest in eastern and southern parts of the U.S. Corn Belt, where massive production of the yellow grain will be needed to make up for drought-stressed crops in the west.

With corn prices hovering near eight-year highs, the world is depending on a massive U.S. harvest to make up for shortfalls in Brazil, the world’s No. 2 supplier after the United States, where the crop was hit by drought and an ill-timed frost.

Strong export demand from China and others, a rebound in ethanol production as drivers return to the roads following COVID-19 shutdowns and surging usage from the feed sector mean that end users will need every bushel that American farmers can produce.

“I am looking at probably a record-breaking crop if it finishes right,” said Eric Honselman, who grows corn and soybeans on 2,000 acres (810 hectares) near Casey, Illinois. “We have just been blessed.”

With the weather forecast looking favorable, Honselman was took time off in mid-July, a critical period for corn development in his area, to attend his daughter’s softball tournament in Florida rather than worrying about crops. He estimated that his corn would yield at least 240 bushels per acre, up about 9% from 2020.

The U.S. government on Monday predicted the U.S. crop would average a record 179.5 bushels per acre in 2021. If realized, total U.S. corn production would reach 15.165 billion bushels, up 6.9% from a year ago and the biggest ever.

The outlook came despite concerns about dry soils in the northern and western reaches of the Corn Belt where farmers have seen their spring wheat crop wilt and condition ratings for corn have fallen sharply throughout June and early July.

Recent history shows that it would take a weather disaster for the corn crop to fall below the U.S. Agriculture Department’s July yield outlook, which matched the figure it has been predicting since February.

Since the crop-wrecking drought of 2012, when USDA slashed its yield outlook by 12% in July and the final figure reflected a 17-year low, the government’s final yield estimate has come in below the July forecast only once, by 3.6% in 2020.

That year, a severe windstorm leveled fields across broad swaths of Iowa, the top corn production state, in early August.

Prior to 2020, final yields according to the USDA increased from the July estimate for seven straight years by an average of 2.2%.

But even after the strong start, more beneficial weather is needed to push the U.S. crop across the finish line as signs of stress are threatening to take the top end off of growers’ yield expectations.

Most of the Dakotas, Minnesota, Iowa and Nebraska are under some level of drought, climatologists say, and below-average rains are forecast for the next two weeks.

“It is a critical time,” said David Bruntz, who has been farming for 50 years in Friend, Nebraska. “Our last good rain was three weeks ago. We are at the mercy of Mother Nature.” (Reporting by Mark Weinraub, editing by Karl Plume and Marguerita Choy)