May 18, 2005

USDA corn estimates reinforce need for market development, says NCGA

The National Corn Growers Association (NCGA) says the US Department of Agriculture's (USDA) estimate for corn supplies this marketing year reinforces the need for market development. Corn supplies are expected to exceed 2.5 billion bushels for the 2005-06 marketing year.

"The USDA report shows we are still feeling the effects from the record corn crop produced in 2004," said NCGA President Leon Corzine. "There is plenty of corn supply for our traditional markets. The concern we have on the farm and as an organization is market development."

"We are continuing and will continue to produce corn; we must vigorously develop new markets and new uses for corn. That points to the need and importance of NCGA, its member states and the checkoff to create these new markets and new uses."

USDA projects this year's corn crop at 10.985 billion bushels, or 7 percent below last year's record 11.8 billion bushel crop. However, this is nearly 9 percent higher than the 2003-04 crop production, which was another record year, according to Max Starbuck, NCGA director of livestock and economic analysis.

"The May report is not based on production surveys but rather on trend estimates," he says. "Weather still remains the key variable when estimating production this early in the growth cycle and that may be forgotten as one focuses in on the numbers."

Starbuck noted that the USDA has put 2005-06 exports at 1.950 billion bushels, which he says seems very aggressive, but increases fuel ethanol production by only 100 million bushels this crop marketing year, which he says seems very weak.

"Ethanol use again leads in projected growth. In fact, corn-based ethanol production is progressing at a rate to surpass an annual production capability of 5 billion gallon in early 2006," Starbuck says.