Corn Projection Still Second Highest

Hundreds of media reports were generated Monday based on USDA’s Prospective Plantings report showing an expected eight percent decline in corn acres compared to last year. Headlines squawked over higher food prices and much more gloom and doom to be expected as a result of this projected drop, including tighter margins for ethanol producers.

The forecast now is for 86 million acres of corn - which as the National Corn Growers Association points out - is still the second-highest acreage intention since 1949. Besides that, its best to keep in mind that this is only the very first guess by USDA of planting intentions, and they have been known to be wrong.

“We’re always cautious when we review the March projections, because they are made before any seeds really enter the ground,” said Ron Litterer, NCGA president. “The corn acreage projections also have a tendency to go up. Last year, for example, there was a difference of more than 3 million acres between the March estimate and the final number.” Litterer pointed out USDA’s March report has underestimated actual corn acres in the each of the last four years.

The March USDA report would indicate approximately 79 million harvested acres. If the average trend yield of 155.5 bushels per acre is realized, corn producers would be on track to produce approximately 12.3 billion bushels in 2008 – the second-highest production ever. The USDA’s June 30 report will provide a clearer view of 2008 corn acreage.