U.S. corn inventories before the 2014 harvest will triple to the highest since 1988 as output jumps to a record following the worst drought in seven decades, the government said.
Stockpiles before next year’s harvest may rise to 2.177 billion bushels from a 17-year low of 632 million projected this year, the U.S. Department of Agriculture said today in a report. Yields may average 163.6 bushels an acre after dropping to 123.4 bushels last year. Production of the grain, the nation’s biggest crop, will rise 35 percent to a record 14.53 billion as consumption increases 16 percent.
“Rising supplies will mean lower feed costs for livestock producers,” Peter Riley, an economist at the USDA’s Farm Serve Agency, said at the annual agricultural outlook forum in Arlington, Virginia.
Corn prices paid to farmers in the 12 months that begins Sept. 1 will average $4.80 a bushel, down from a record $7.20 forecast this year, the USDA said yesterday. An increase in exports and use in domestic grain-based ethanol will be countered by declining gasoline consumption and increasing output in Brazil, Argentina, Ukraine and India, Riley said.
“The world market has changed as high U.S. prices have led to increased exports by other suppliers,” Riley said. “Falling U.S. gasoline consumption will restrain ethanol production. Brazil is shipping more to the U.S.”