Reduced Supplies Increase Corn Price Outlook

August 17, 1999

With reduced corn supplies in 1999-2000 and lower ending stocks than projected in July, USDA increased the price outlook this month. The average corn yield is forecast at 134.7 bushels per acre, and if realized, it would be the second highest yield ever.

USDA's expected farm price average for 1999-2000 is $1.70-2.10 per bushel compared with $1.65-2.05 per bushel projected in July. For 1998-99, the season average price should be $1.95 per bushel.

The August report is the first survey-based of the season and reflects Aug. 1 conditions. The average corn yield has been forecast at 134.7 bushels per acre compared with July's trend-adjusted projection of 135.8 bushels and the actual 1998 yield of 134.4 bushels. Corn production this year is expected to total 9.6 billion bushels, 89 million less than the July projection and 2% less than 1998.

The first survey-based forecast for sorghum showed 588 million bushels of production, an increase of 13% from the 520 million produced in 1998. Projected farm prices in 1999-2000 are $1.40-1.80 per bushel, about 805% of the corn price.