USDA Chief Economist Says Crop Production Up, Prices DownMon, 04 Mar 2013 08:12:49 CST
USDA's chief economist says U.S. crop production should increase in 2013 and that could lead to lower prices for farmers.
U.S. Department of Agriculture Chief Economist Joe Glauber told the annual Agricultural Outlook Forum held near Washington, D.C., that record production of some crops is a possibility this year.
" We're expecting record crops for corn and soybeans this year, again dramatic improvement particularly for corn. Remember last year between our May estimate, our May projections and what we ended up with at the end of the year we lost four billion bushels. We're expecting to rebound on that, up about that amount this year. We've seen the eastern Corn Belt look a lot better than what we saw just four or five months ago as a percent of total area in drought, we've seen some improvement, five to ten percent improvement over the last couple of months," Glauber said.
But, he said, with record production there could be a significant fall in many commodity prices.
"We're projecting corn prices, season average prices below five dollars, again a big, deep drop certainly from where we are. Wheat prices to come down a bit as well. Soybeans down. Some improvement for rice and cotton actually and that's largely due to the domestic balance sheets that should tighten up a bit."
Glauber did bring up the lingering drought, which he says his office will be watching very carefully for its affect on yields.
"However, I do think that at least the empirical data suggests a return to more normal yields as we move into the spring and with better rains and a return to more normal weather we will hopefully get some higher yields."
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