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• FRB CHICAGO WAITE MEMORIAL BOOK COLLECTION DEPT. OF AG. AND APPLIED ECO • MICS 1!I 1994 BUF144, . - 232 1.11 r 5. UNIVE• 1111 ST. P AGRICULTURAL LETTER FEDERAL RESERVE BANK OF CHICAGO January 25, 1991 Revised estimates still point to lower corn stocks The latest estimates and projections from the U.S. Department of Agriculture continue to imply that carryover stocks of corn will be lower again next fall. The final estimate of the 1990 corn harvest was pegged at just over 7.93 billion bushels, virtually unchanged from the previous forecast made in November and up 5.4 percent from the harvest of 1989. With new evidence that a rise in domestic use may offset a decline in exports, total usage of corn for the 1990/91 marketing year is now projected to reach nearly 8.10 billion bushels, up slightly from the previous forecast and close to the record high of 1989/90. If that is the case, carryover stocks of corn would retreat to 1.18 billion bushels by the end of the marketing year, down 12 percent from the relatively tight level of last fall. • The 1990 corn harvest was the largest in four years but well short of the 1985 record of 8.88 billion bushels. An increase in both acreage and yields contributed to last year's larger harvest. Farmers nationwide harvested nearly 67 million acres of corn for grain last fall, up 3.5 Corn production, usage, and carryover stocks billion bushels 10 8 percent from the year before. The average yield, at 118.5 bushels per harvested acre, was up nearly 2 percent from 1989 and the third highest on record. Farmers in the five states of the Seventh Federal Reserve District harvested some 4.18 billion bushels of corn last fall, up 4.6 percent from the 1989 crop. The average yield per harvested acre for the five-state region, at 125.4 bushels, was up 3.6 percent from the 1989 average and also the third highest on record. Michigan farmers achieved a new high in per acre corn yields while farmers in Wisconsin matched an earlier high. The focus of the corn market has been on the abrupt downturn in exports, particularly to the USSR, since the start of the new marketing year in September. Reflecting this, the tonnage of U.S. corn exports during the three months ending with November was off more than a third from the strong pace of the year before and the second lowest for that period in the past 15 years. Weekly reports since then indicate that the sluggish export pace continued into early January. However, the negative aspects of the slow export pace have been eased by the recent USDA report that indicated U.S. stocks of corn on December 1 were considerably less than expected. The implications were that domestic use of corn during the three months ending with November was up nearly a tenth from the year-earlier pace and at a new high for that period. In short, the report revived hopes that an increase in domestic use may offset the decline in exports. Trends in exports and domestic use of corn during the remainder of the 1990/91 marketing year remain highly uncertain. But in light of the recent trends, the USDA lowered its export projection for the 1990/91 marketing year by 100 million bushels while raising its forecast of domestic use by 150 million bushels. The latest projections imply that the pace in corn exports during the final three quarters of the 1990/91 marketing year will pick up considerably but remain some 14 percent below the record pace of last year. Alternatively, domestic use of corn during the final three quarters of the 1990/91 marketing year is projected to remain at a high level and up nearly 7 percent from a year earlier. Many private analysts feel that the latest USDA projections of corn exports and domestic use are somewhat high. Nevertheless, corn prices have recently recovered to a range of $2.30 to $2.35 a bushel. And the USDA projection of a further tightening in carryover stocks adds to the possibility of a weather-related rally in corn prices this spring. 6 4 2 0 5 4 3 • Number 1804 2 1 0 1985/86 86/87 87/88 88/89 89/90 90/91 Gary L. Benjamin Selected agricultural economic indicators Percent change from Latest period Receipts from farm marketings ($ millions) Crops* Livestock Government payments September September September September Value Prior period Year ago 18.1 36.5 3.3 22.7 5 7 6 -53 9 13 10 -72 15,979 8,163 7,697 119 Two years ago Real estate farm debt outstanding ($ billions) Commercial banks Farm Credit System Life insurance companies September 30 September 30 September 30 17.3 29.4 10.6 1.1** -0.5** 5.3** 5 -3 11 13 -11 14 Nonreal estate farm debt outstanding ($ billions) Commercial banks Farm Credit System September 30 September 30 33.2 11.0 4.1** 4.1** 5 7 8 12 Interest rates on farm loans (percent) 7th District agricultural banks Operating loans Real estate loans Commodity Credit Corporation October 1 October 1 January 11.94 11.07 7.12 0.0** -0.2** -3.4 -2 -2 -8 2 0 -20 Agricultural exports ($ millions) Corn (mil. bu.) Soybeans (mil. bu.) Wheat (mil. bu.) November November November November 3,500 168 63 81 15.5 55.6 110.8 -7.9 -4 -43 -18 7 4 12 2 -16 Farm machinery salesP (units) Tractors, over 40 HP 40 to 100 HP 100 HP or more Combines December December December December 6,861 2,853 4,008 1,082 39.7 16.9 62.3 -10.7 26 8 42 7 51 16 92 114 *Includes net CCC loans. **Prior period is three months earlier. Preliminary oC AGRICULTURAL LETTER FEDERAL RESERVE BANK OF CHICAGO Public Information Center P.O. Box 834 Chicago, Illinois 60690 (312) 322-5111 LOUISE LETNES LIBRARIAN DEPT OF AGRIC & APPLIED ECON 23.1 CLASSROOM OFFICE BUILDING 1994 BUFORD AVENUE ST PAUL MN 5510B- 1012 FEB - 1'91 27--; itLi.S.i-OSTAGEii friL B METER 33254681_ •2 0 :I:
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