Recent Weather Helps Crop Harvest

The U.S. corn and soybean harvest is all but completed and the dairy feed supply and price picture is coming into clearer focus but it’s not looking food for dairy farm feeding costs. Dairy Profit Weekly editor Dave Natzke reported in Friday’s broadcast that October’s weather helped the U.S. crop harvest advance quickly, with nearly all corn and soybeans harvested by the first week of November but, with the early harvest, USDA now estimates corn production at about 12.5 billion bushels, down 1percent from the October estimate and 4 percent less than last year’s record production. U.S. soybean production is forecast at a record-high 3.38 billion bushels, but is also down 1percent from the October forecast.  

As a result of the reduced crop estimates compared to a month ago, USDA is now forecasting smaller feed grain supplies for 2010 and 2011, resulting in higher prices for dairy farmers who buy feed, Natzke warned.

On the demand side, USDA expects an increase in corn for ethanol production, resulting in the smallest carryover of corn since 1995-96. Export demand, especially to China, will result in a decline in soybean carryover, as well.

 The season-average farm corn price is projected at $4.80-$5.60 per bushel, up 20 cents compared to last month, and well above the previous record of $4.20 per bushel in 2007/08. 

The U.S. season-average soybean price paid at the farm is projected at $10.70-$12.20 per bushel, up 70 cents compared to last month, with soybean meal projected at $310-$350 per ton, up $20 per ton. 

For producers who price feeds off the Chicago Mercantile Exchange, 2011 corn futures contracts averaged $5.76 per bushel as of the close of trading on November 10. CME soybean futures contracts for November 2010 through August 2011 averaged $13.21 per bushel, while soybean meal futures averaged more than $356 per ton, according to Natzke.