May 3, 2012

 

US Midwest corn yield set to hit new record level

 

 

According to the latest figures from the USDA, US farmers across the Midwest are on track to produce the biggest corn harvest in 75 years.

 

This despite last week's gloomy weather across much of the region.

 

More than half of the seasonal corn crop had been planted as of Monday (Apr 30), a jump from 28% just a week ago and 12% as measured this time last year. The five-year average is 27%.

 

Overall, farmers will increase corn production to nearly 96 million acres in 2012, the most of any year since 1937, according to the USDA in its weekly report.

 

While not a record, 12% of the year's soy crop has also been planted, compared with 6% a week ago. The five-year average is 5%.

 

In Iowa, farmers have planted 50% of the corn crop - an impressive increase from just 9% the previous week. In Minnesota, the corn crop is 48% complete, compared with just 1% last year, according to the USDA.

 

A study published a week ago in the journal Climate Change said global warming will be severely impacting the corn market in Corn Belt states. Factors such as market policies or oil prices have comparatively little effect on corn prices than global warming, says the study by researchers from Stanford University and Purdue University. The trend will force farmers to increase their crops' heat tolerance or move northward to farm near the Canadian border to avoid the heat waves.

 

"US corn-price volatility exhibits higher sensitivity to near-term climate change than to energy policy influences or agriculture-energy market integration," researchers Diffenbaugh, Thomas W. Hertel, Martin Scherer and Monika Verma wrote in the article published on Sunday.

 

The scientists say policies do make a difference, particularly government mandates surrounding the corn market. Federal biofuel mandates, for example, are currently contributing to the oversupply of corn, and could make it difficult in future years for farmers to adjust to volatile yields, they say.

 

Congress is currently considering renewal of the federal farm bill for the first time since 2008. Without action, the bill will expire on September 30, ending a number of government programmes designed to protect and benefit farmers.

 

Iowa Sen. Tom Harkin (D) said that Congress should improve conservation policies that can protect fields against excessive rainfall or droughts, but he also noted that demand for grains are on the rise worldwide instead of a descent.

 

"There will be temporary fluctuations in the corn market, but I think the trend is going to be one where there's going to be strong prices for corn for the foreseeable future," Harkin said.