USDA Corn Forecasts Show Large Crop, Low Feed Costs

The USDA released their August crop forecasts on Friday and corn is projected at 15.2 billion bushels this season which would be a record high.

USDA Economist Rob Johannson said that could push corn outside of the trade range and drive down prices despite some marketing the crop above the $4 range.

“That would imply that the price going forwards is going to be lower than those numbers, even potentially in the $2 range for corn.”

The USDA lowered its corn price forecast to $3.15 a bushel.

With high corn production means lower feed costs for cattle producers, and Johannson said they are likely happy with the forecast and can take advantage of it.

“Next year we’re expecting production to be up in all categories in meat and expect producers to weights on a lot of their slaughter animals.”

Beef production is expected to rise about 3.5 percent and steer prices fall next year, but with lower feed costs, margins could better than this year.