The US Department of Agriculture will issue its latest supply-and-demand report tomorrow (Friday, August 10), and all expectations are that the agency will again reduce its corn production forecast, according to a Dow Jones Newswires poll of analysts. These analysts project USDA will cut production another 15.4% after a devastating drought has decimated much of the US corn crop.
That means a forecast of 10.97 billion bushels of corn for 2012, the analysts believe, down from USDA's July forecast of 12.97 billion bushels and 2011's production of 12.36 bushels. That will result in a corn-crop yield of 126.2 bushels per acre -- a decline of 13.6% from USDA's July forecast of 146 bushels per acre -- and corn inventories at the end of the 2012-2013 marketing year at their lowest levels since 1995-1996, according to the analysts. Similarly, soybean production is projected to decrease 8.7%, leading to the lowest soybean inventories since 2003-2004.
Even for petfood manufacturers that do not use corn or soybean in their formulations, these drops in supply can significantly impact the price of other grains and, especially, the price of protein ingredients because of the number of food production animals that eat feed made of corn and other grains. With our increasingly global economy, these crop shortages in one of largest grain-producing countries can affect feed, food and petfood producers around the world.
What's a petfood executive or purchasing manager to do? Stay informed -- and one way to do so is to register for the latest in WattAgNet.com's Webinar series, "USDA August Crop Report: Analysis and Implications," on Monday, August 13, at 1 PM CDT. Registration is free.