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/-3 DC BRANCH 1 0 Federal Reserve Bank of Chicago - • - July 16, 1971 E TIO AL AGR CORN ACREAGE is up substantially from last year according to the official July 1 crop report. Acreage to be harvested for grain was estimated at 64.5 million acres-12 percent above a year ago and over 6 percent larger than in the bumper crop year of 1967, when 60.5 million acres were harvested. o LTURE RARY— RE Lte PROCUREM CURRENT SEFA Farmers in several leading corn-producing states apparently boosted their acreage well above the increase for the nation. Iowa farmers, top producers in 1970, enlarged-their corn acreage by 18 percent. Acreage in Minnesota and Nebraska, two other major corn-raising states, increased 23 and 14 percent, respectively. These three states accounted for over 30 percent'of total corn production in 1970. Increases in two other leading corn-producing states, Illinois and Indiana, lagged behind the increase for the nation. Illinois corn acreage is estimated to be only 2 percent larger than in 1970, and Indiana acreage 9 percent larger. This expansion is in response to the highest corn prices in years and a less restrictive government program. When farmers were making their spring planting decisions, corn prices averaged over $1.40 per bushel—the highest since 1953, when the government support price was much higher. In addition, the 1971 feed grain program allowed participating farmers to plant as much corn, or any other crop, as they desired after setting aside 20 percent of their feed grain base. By contrast, under the 1970 program corn acreage could not exceed allotted feed grain base acreage (average feed grain acreage during 195960). More favorable weather this year that permitted early planting was conducive to increased corn acreage, also. • The large increase in acreage sets the stage for a record corn harvest this fall. .Threat of another serious onslaught of leaf blight disease this year, however, makes prospective yields per acre extremely uncertain. So much so that the Department of Agriculture refrained from making a July estimate. such an estimate, usually based on trends, could be misleading Last year, leaf blight disease and drought combined to reduce the national average yield to less than 72 bushels per acre, compared to about 84 bushels per acre in 1969. As a result, total corn output fell 10 percent in 1970, despite a 5 percent larger acreage harvested. Leaf blight disease has been discovered in varying degrees throughout most corn-producing states. But, unlike last year when virtually all of the crop was susceptible to the disease, nearly 30 percent of this year's crop was planted with blight• resistant seed. Another 30 percent was planted with varying blends of resistant and susceptible seed. Thus, between 30 and 45 percent of the crop is resistant to blight. Well over half of the corn acreage in the southeastern United States was planted Number 1126 with resistant-type seed. Incidence of blight in this region, where the disease would normally be most advanced, is reported to be much lighter than last year. Many Corn Producers Utilized Blight-resistant Seed in 1971 1971 1 acreage for grain t2_ww Percent2 Percentage planted by seed type of U.S. Blight. total resistant Blended3 Susceptible Other4 (million acres) Iowa Illinois Minnesota Nebraska Indiana 31 major producing states 11,788 10,267 5,651 5,583 5,479 18 16 9 9 8 30 32 24 12 30 30 44 23 28 41 63,585 99 28.7 29.2 34 •15 40 46 19 28.3 6 9 13 14 10 13.8 1July 1 estimate. 2Rounded to nearest whole percent. 3Combination of susceptible and resistant. 4Includes F2, secondleneration resistant seed, miscellaneous other types, and unreported types. Barring some other natural calamity, such as corn borers or drought, normal yields may be expected from the proportion of the crop planted with resistant seed. Production from these acres could push corn output to record levels even if blight reduces yields about the same amount as a year ago on the remaining susceptible acres. In addition to the potential for a record-large corn harvest, production of other feed grains, most notably grain sorghum, is estimated substantially above a year ago. Prospective grain sorghum production at 916 million bushels is 31 percent above 1970 levels. While feed supplies appear on the rise, demand appears on the decline. Livestock numbers are being reduced. The fall pig crop is expected to be 8 percent smaller than a year earlier, and broiler chick placements have been 3 percent below yearago levels in recent weeks. A precipitous drop in cash prices for corn does not appear imminent due to the current low level of corn supplies— carryover stocks are expected to be one-third smaller this fall— arta uncertainty about the final size of this year's crop. If present production prospects become a reality, however, corn prices will be substantially below current levels by late 1971. Dennis B. Sharpe Agricultural Economist
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