Climatologist: Forecast favors high corn yields, low prices
“It’s a generally favorable outlook as I see things now,” Elwynn Taylor told FarmWeekNow.com. Listen to Dan's interview with Taylor.
Published: Jun 8, 2012
Dryness concerns have intensified in recent weeks as the majority of Illinois and a large portion of the western Corn Belt are abnormally dry or in moderate to severe drought, according to the U.S. Drought Monitor.
The driest regions of the state are Southern Illinois and a portion of Central Illinois to the east of the Illinois River.
However, a good start to the growing season, a favorable forecast, and high crop condition ratings still suggest farmers are on pace to harvest a record corn crop, according to Elwynn Taylor, Iowa State University climatologist.
At the World Pork Expo in Des Moines, Taylor predicted above-average temperatures with normal precipitation the next two weeks.
“It’s a generally favorable outlook as I see things now,” he said. “But that could change.”
Editor's note: Check out the latest crop conditions at Cropwatchers .
Taylor’s model currently suggests a national corn yield average of 164 bushels per acre, just two bushels below USDA’s May forecast, is the most likely scenario.
If the high yield is realized, Taylor estimated corn prices could average just $4.60 per bushel, down significantly from last year’s average range of $5.95 to $6.25.
The price forecasts obviously change if the current dryness concerns escalate into a major production problem.
“There are a lot of areas of the Corn Belt that are a bit dry,” said Steve Meyer, president of Paragon Economics. “We’re going to have to have some timely rain if we’re going to hit trend yields (or above).”
Meyer predicted the average corn price could drop to as low as $4 if the national corn yield averages 166 bushels or it could rally to an average of $6 if there is a repeat of last year’s harvest, when the corn yield averaged 147 bushels.
Darrel Good, University of Illinois economist, said timely rainfall will become more important each week.
“There’s a large area of the country living on the edge, in terms of moisture, and the critical period to determine yields is just now beginning,” Good said.
“We need to move back to a pattern of more abundant rainfall,” he added. “Without that, we’ll see a deterioration of crop conditions and lower production.”
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