December 26, 2008

US average corn price pegged at US$4 in 2008

The estimated average farm price for corn in 2008 is US$4 per bushel, lower than the price in 2007, according to the USDA's latest corn supply and demand balance sheet.

The National Corn Growers Association (NCGA) said this indicates higher ethanol demand can be accommodated with little impact on corn and food prices.

Corn producers in 2008 managed to harvest a good crop and all corn demands despite numerous obstacles, said NCGA President Bob Dickey. Difficulties included higher costs for land, fuel, and fertilisers and trying to break even, and high prices for corn futures was unrelated to ethanol demand and did not always mean more profits for producers, Dickey said.

The USDA estimates corn production at just over 12 billion bushels and yield at 153.8 bushels per acre, with total corn supply at nearly 13.7 billion bushels.

Estimates for corn usage for ethanol and byproducts such as distillers grains, were reduced from 4 billion bushels to 3.7 billion bushels, representing 27 percent of supply. Export estimates also fell from 1.9 billion bushels to 1.8 billion bushels. Ending stocks were projected to reach 1.474 billion bushels, representing 11 percent of supply.