View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

al
ter

Federal Reserve Bank of Chicago . . .
January 28, 1977
•

RECENT CROP REPORTS from the USDA
provide fresh insights into the availability and utilization of 1976 crops as well as production prospects for
1977. The 1976 annual summary of Crop Production
indicated that last year's harvest of both corn and
soybeans exceeded earlier expectations, and the total
1976 crop harvest virtually equaled the year-earlier
record. The Grain Stocks report confirmed expectations that the utilization of soybeans continued at a
record pace during the latter part of 1976, while the
rise in corn utilization was surprisingly small. The
Prospective Plantings report indicated that farmers
intend to boost 1977 plantings of both corn and
soybeans above year-earlier levels.

•

The 1976 corn production estimate was raised to
nearly 6.2 billion bushels, a surprisingly large increase of 153 million bushels from the previous estimate and 7 percent above the revised tally for the
1975 harvest. The revised production estimate
coupled with last fall's carryover stocks indicate total
corn supplies for the 1976/77 marketing year that
started last October exceeded 6.6 billion bushels, 457
million bushels more than a year earlier and second
only to the 6.7 billion bushel supply in 1972/73.
Corn and soybean production, 1976
Ill.

Ind.

la.

Mich.

Wis.

U.S.

Corn
Acres
Planted (thou.)
Change (percent)
Harvested (thou.)
Change (percent)
Yield per acre (bu.)
Change (bu.)
Production (mil. bu.)
Change (percent)

12,000 6,500 13,800 2,450
4.5
6.5
8.1 11.1
11,690 6,300 12,750 2,050
8.1 11.9
3.7
7.3
107 110
90
69
0 -11
- 9
12
1,251 693 1,148 141
3.7 -7.4
-0.2 25.6

3,650 84,121
4.3
7.6
2,180 71,085
- 8.8
5.7
68
87.4
1.2
- 15
148 6,216
-25.3
7.2

M

1-101it

Ilk I

Ui.r
r‘E C)N

LY Number 1415

the January 1 stocks and total supplies for the entire
marketing year indicate corn utilization during the
October-December 1976 period was up less than 3 percent from the same period a year ago. And in light of
the record pace of corn exports during the same period,
it appears that domestic utilization of corn was up
only 1.5 percent, a surprisingly small increase considering the cold weather, poor pasture conditions,
and increased hog and broiler inventories.
The small increase in domestic corn utilization
during the October-December period may be partially
due to an apparent 50 million bushel pickup in
domestic wheat utilization during the same period,
perhaps reflecting increased feeding to livestock.
Nevertheless, the rise was less than expected and it
failed to offset the slow wheat exports.
The Prospective Plantings report indicates
farmers intended-as of the first of this year-to boost
1977 soybean plantings to 53.1 million acres, 2.8
million acres more than last year but still well short of
the 1973 record of 56.8 million acres. In contrast to
widely anticipated declines, farmers reported they intend to plant 84.5 million acres of corn, up slightly
from last year's level which in itself was the highest
since 1949. Indications of a sharp drop in spring wheat
coupled with an earlier report of last fall's seeding of
winter wheat suggest total wheat plantings may
decline to 74.7 million acres, down 7 percent from a
year ago but still about equal to the large acreage seeded in 1975.

Soybeans
Acres
Planted (thou.)
Change (percent)
Harvested (thou.)
Change (percent)
Yield per acre (bu.)
Change (percent)
Production (mil. bu.)
Change (percent)

•

7,600
- 7.9
7,560
- 8.0
32.0
- 4.0
242
-18.2

3,300
- 9.6
3,280
- 9.6
33.0
- 0.5
108
-11.0

6,610
- 5.6
6,590
- 5.5
31.0
- 3.0
204
-13.8

570
- 7.3
565
- 7.4
20.5
- 5.5
12
-27.0

160 50,327
-20.0 - 8.0
152 49,443
-20.4 - 8.0
22.0
25.6
- 3.5 - 3.2
3 1,265
-31.3 -18.2

The 1976 soybean production estimate was raised
to 1.26 billion bushels, up nominally from earlier expectations, but still 18 percent short of the revised estimate of the 1975 harvest. In conjunction with last
fall's large carryover, total soybean supplies for the
current marketing year that started last September are
down nearly 13 percent from the year-earlier record.
The Grain Stocks report for January 1 provided
clues to domestic utilization rates for grains and confirmed other indications that soybean utilization
slightly exceeded the record year-earlier pace during
the last four months of 1976. The differential between

The implications of the three reports will likely
undermine some of the recent support in grain prices,
while strengthening the support for high soybean
prices. The unexpectedly large increase in the corn
production estimate and the lower-than-anticipated
utilization rates for both corn and wheat portend
larger carryover stocks of grain. Reflecting this, the
USDA raised its estimate of this fall's corn carryover
to 724 million bushels, 196 million above the previous
estimate and the highest since 1972. Projected wheat
carryover was raised 77 million bushels to 1.1 billion,
the highest since the early sixties. In contrast, the
record-setting pace in crushing activities has further
tightened the soybean supply/demand balance,
despite the upward revised production estimate. As a
result, this fall's projected carryover of soybeans has
been reduced to 75 million bushels, down from the
previous estimate of 85 million and sharply below the
past three-year average of 200 million bushels.
Gary L. Benjamin
Agricultural Economist